EURUSD Technical Analysis | Forexlive

USD

• The Fed left interest rates unchanged as expected at the last meeting, with virtually no change in its statement. The Dot Plot showed three more rate cuts for 2024 and the economic projections were improved with higher growth and inflation and lower unemployment.
• U.S. first-quarter GDP surprisingly beat expectations, although its main components nonetheless showed a strong economy. Core PCE, however, was surprised on the upside, pushing rate cuts further.
• The US CPI beat expectations for the third consecutive month, while the US PPI was in line with forecasts.
• U.S. NFP beat expectations across the board, although average hourly earnings were in line with forecasts.
• US April PMIs missed expectations, with commentary pointing to weaker inflationary pressures but also an increase in layoffs.
• The market expects a first rate cut in September.

EUR

• The ECB left interest rates unchanged as expected and opened the door to a rate cut in June.
• The recent Eurozone CPI did not meet expectations.
• The labor market remains historically tight, with the unemployment rate at historically low levels.
• The latest Eurozone PMIs beat expectations on the services side, while that of the manufacturing sector missed a further decline in terms of contraction.
• The market expects the ECB to cut rates in June.

EURUSD Technical Analysis – Daily Timeline

On the daily chart, we can see that EURUSD has broken through the key resistance at 1.07 and is now rejected by the confluence of the 50% Fibonacci retracement level and the red moving average at 21. C This is where sellers step in with defined risk above the Fibonacci level to position themselves for a fall to new lows. Buyers, on the other hand, will want to see the price move higher to increase bullish bets in the main trendline.

EURUSD Technical Analysis – 4 hour time frame

On the 4-hour chart, we can see that the recent price action may have formed a bearish flag, although the price will need to break below the lower trendline to confirm this. Price is struggling just at the upper limit of the flag as sellers continue to position themselves for a fall to new lows. A breakout higher would invalidate the bear flag and give buyers a clear way to target the major trendline around the 1.08 handle.

EURUSD Technical Analysis – 1 Hour Timeframe

On the hourly chart we can take a closer look at the recent price action and we can notice that we have another important area around the 1.0690 level where we can find the confluence of the previous resistance turned support, of the line of minor black trend and the 4.21-hour moving average. If we get a pullback into the trendline, we can expect buyers to build on it with risk set below the 1.0690 area to position themselves for a rally to new levels. higher. Sellers, on the other hand, will want to see the price fall to increase bearish bets to new lows.

Events to come

Today we wrap up the week with the US PCE report.