EURUSD Technical Analysis | Forexlive

USD

• The Fed left interest rates unchanged as
  expected at the last meeting with basically no change to the statement.
• Fed Chair Powell stressed
  once again that they are proceeding carefully as the full effects of policy
  tightening have yet to be felt.
• The recent US CPI missed
  expectations across the board bringing the expectations for rate cuts
  forward.
• The labour market is
  starting to show weakness as Continuing Claims are now
  rising at a fast pace and the recent NFP report
  missed across the board. Last week though, the US Jobless Claims beat
  forecasts by a big margin, although volatility in the data is normal.
• The latest US PMIs came
  basically in line with expectations with a miss in the Manufacturing index and
  a beat in the Services measure.
• The recent Fedspeak has been leaning on
  the hawkish side, but the recent data suggest that the Fed is likely done for
  the cycle.
• The market doesn’t
  expect the Fed to hike anymore.

EUR

• The ECB left interest rates unchanged as
  expected at the last meeting as the central bank has ended its tightening cycle.
• President Lagarde highlighted
  the weakness in the Eurozone economy and reaffirmed that rates will make a
  substantial contribution to curbing inflation.
• The recent Eurozone CPI missed
  expectations on the headline figures but the Core measure remained unchanged.
  This is unlikely to change the ECB’s stance anyway.
• The labour market remains historically
  tight but the unemployment rate recently ticked higher.
• The recent Eurozone PMIs slightly
  beat expectations on both the Manufacturing and Services measures although the
  indexes remain in contraction.
• The ECB members continue to repeat that they will
  keep rates high for as long as necessary to bring inflation back to their 2%
  target.
• The market doesn’t expect the ECB to hike anymore.

EURUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that EURUSD reached
the key resistance around
the 1.0950 level where we can also find the 61.8% Fibonacci retracement level
for confluence. This is
where we can expect the sellers to step in with a defined risk above the
resistance to position for a drop into new lows. The buyers, on the other hand,
will want to see the price breaking higher to continue targeting new highs.

EURUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we have a divergence with the
MACD right at
the key resistance. This is generally a sign of weakening momentum often
followed by pullbacks or reversals. In this case, it might be another
confirmation for the sellers that we could see at least a pullback. The buyers
should lean on the lower bound of the channel to position for a break above the
resistance, while the sellers will look for a break lower to increase the bearish
bets into new lows.

EURUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
have another trendline where
more aggressive buyers might be leaning onto to position for another extension
to the upside, although the risk to reward would be worse. The sellers, on the
other hand, will want to see the price breaking below the trendline to get an
extra confirmation for a move lower.

Upcoming Events

Today, we will get the latest US Consumer Confidence
report and it will be interesting to see how the US consumers see the labour
market. On Thursday, we will have many key economic releases with the Eurozone
CPI and Unemployment Rate in the morning and the US PCE and US Jobless Claims
in the afternoon. Finally, on Friday, we conclude the week with the US ISM
Manufacturing PMI which missed expectations by a big margin the last time.

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