EUR/USD Price Forecast: Turns sticky to 20-day EMA

The Euro (EUR) trades marginally higher against the US Dollar (USD) at approximately 1.1600 during the initial European trading session on Thursday. The widespread currency pair remains relatively stagnant, with investors eagerly anticipating the U.S. Nonfarm Payrolls (NFP) data for August, slated for release on Friday. Market participants will intently scrutinize the U.S. NFP report to glean fresh insights into the Federal Reserve's (Fed) monetary policy expectations.

According to TD Securities, the forthcoming U.S. payrolls announcement could provoke an uneven reaction in rates markets. Analysts caution that a robust NFP could heighten anticipation of interest rate hikes, while persisting inflation maintains market apprehension and the reaction remains asymmetric, as investors are hesitant to fully incorporate a more aggressive Fed stance until the next CPI print is unveiled.

Concurrently, TD Securities posit that a relatively subdued payroll figure would enable the market to temper expectations for a September rate hike, highlighting their belief that downside surprises in employment data are more likely to sway near-term policy expectations than upside ones. Although the Euro is currently trading above the U.S. Dollar, it is underperforming against its other counterparts despite financial markets becoming increasingly confident that the European Central Bank (ECB) will raise policy rates this month.

On Wednesday, ECB Governing Council member Joachim Nagel, noted for his hawkish stance, stated that markets estimate an over 95% probability of a September rate hike. In the daily chart, EUR/USD is currently trading at 1.1598, holding just above the 20-period exponential moving average (EMA) at 1.1594, which suggests a slightly bullish short-term outlook as price is defending this dynamic support level.

The Relative Strength Index (14) at 53.23 remains in neutral territory with a slight positive bias, indicating that upside momentum is constructive but not excessive following the recent retreat from overbought readings seen above 70. On the downside, immediate support is situated at the 20-period EMA at 1.1594, where a daily close beneath this level would weaken the present bullish sentiment and expose deeper corrective pressure.

Conversely, the 1.1687-1.1714 range will serve as a significant resistance zone for the currency pair.