EURUSD Technical Analysis | Forexlive

The
recent beat in the NFP data followed
by weak details like the higher unemployment rate and lower average weekly
hours, has weakened the USD as the market started to reprice the hawkish
expectations on a less hawkish side as a looser labour market can bring
inflation down. The miss in the ISM Services PMI added to
the less hawkish expectations, especially due to the lower prices paid
sub-index that may give hopes that core inflation could fall soon.

The big
miss in Jobless Claims was
taken with a pinch of salt due to seasonal adjustments and the Continuing
Claims showed even more improvement which is a sign that workers are able to
find jobs pretty fast after being unemployed. Overall, the big hawkish flip
seen in May due to hot economic data, started to reverse recently as Fed
members expressed preference for a skip at this FOMC meeting and the economic data
started to disappoint.

EURUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that the EURUSD bottomed
out near the 1.07 handle and started to pull back into the 1.08 handle. The moving averages are
about to crossover, which might be an ominous sign for the sellers as the trend
might change and the pullback turn into the first leg of a bigger rally. The
target of this pullback looks to be the 1.0840 resistance where we
should find more sellers.

EURUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the buyers
remain in control and with the recent bounce on the red 21 moving average and a
break above the 1.0780 high, we can expect EURUSD to tap into the 38.2% Fibonacci retracement level
and possibly even the 1.0840 resistance zone. This is where more long-term
sellers should enter the market with a stop likely above the 1.09 handle and
the 1.0533 as the first target.

EURUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that in
the short term the price is making higher highs and higher lows indicating a
bullish structure. The buyers will need to break above the 1.0840 resistance
zone to get even more conviction of a change in trend and start targeting the
1.1033 high. Eventually, it will all come down to the fundamental events this
week.

This week there
are many important events beginning with the US CPI report today, which is
likely to seal the expectations for the tomorrow’s FOMC rate decision. The
easiest scenarios should be a rally in the EURUSD pair if the CPI data misses
across the board and a selloff in case the CPI beats on everything. The market
is likely to focus more on the Core CPI, so that will be the most important
measure to watch.

Later in the week we have another Jobless
Claims report and the University of Michigan consumer sentiment survey, which
has impacted the market a lot last time with the big jump in long term
inflation expectations, so a miss would be welcome news for the EURUSD bulls.