EUR/USD Price Forecast: Gains ground to near 1.1600, bullish vibe prevails above 100-day SMA

During Monday's early European trading session, the EUR/USD currency pair maintained a positive stance near 1.1590. However, traders anticipated a ceiling on the upside due to hawkish remarks from Federal Reserve Chair Kevin Warsh during the Jackson Hole economic symposium. Warsh hinted at potential rate hikes if policymakers did not demonstrate confidence that inflation would decline to 2%.

This hawkish stance bolstered the US Dollar (USD) against the Euro (EUR). Market participants kept a close eye on Germany's preliminary Consumer Price Index (CPI) data, which could influence the Euro's near-term trajectory if it indicated higher inflation. Commerzbank strategists noted that the main focus on Friday was the heightened hawkishness in Fed expectations after Warsh's speech, with his tone registering a 7.4 on the FXS Speechtracker scale, well above the historical average of 6.5.

This hawkish tone, coupled with the Fed Chair's insistence on a firm 2% inflation target and the need for further work to achieve it, pointed to a potential for further tightening even as headline inflation improved but underlying trends remained unchanged. The FXS Fed Sentiment Index remained unchanged at 129.70, indicating a persistent hawkish policy tone.

The EUR/USD currency pair showed a mildly bullish outlook on the daily chart, trading above the 100-day simple moving average and just under the 20-day Bollinger SMA, suggesting that buyers held a slight edge without reaching overbought conditions. The nearest resistance level was the August 26 high of 1.1677, followed by the upper Bollinger band around 1.1710, with May's high of 1.1788 representing a more distant barrier.

Should the pair dip, support could be found at the 100-day SMA of 1.1570, with the August 13 low of 1.1511 offering further cushioning.