EURUSD Technical Analysis – The focus switches to the US PMIs

Fundamental
Overview

The US Dollar this week has
been erasing some of the losses experienced last week after the benign US PPI
and the Trump’s reciprocal tariffs announcement. There hasn’t been any notable
catalyst this week to support the greenback although some analysts pointed to
less dovish comments from Fed’s Waller on Tuesday which would explain the rise
in Treasury yields afterwards.

Yesterday, during the Asian
session we got some positive headlines on the tariffs side as Trump said that a
new trade deal with China was possible. That weakened the US Dollar which
continued to depreciate throughout the European and US sessions.

On the EUR side, today we
got the Eurozone PMIs today which showed steady growth
with another pick up in the manufacturing index, which is more sensitive to the
business cycles. Earlier in the session, we got a poor reading from France
which weighed on the euro as the market pricing for the ECB increased to 80 bps
of easing by year-end.

Those expectations eased
after better data from Germany PMIs and Eurozone PMIs though. The baseline
expectation remains for three more rate cuts.

EURUSD Technical
Analysis – Daily Timeframe

On the daily chart, we can
see that the EURUSD is trading between the 1.0532 resistance and the 1.0450 support. The buyers will
likely step in around the support to position for a rally into the 1.06 handle.
The sellers, on the other hand, will look for a break below the support to
increase the bearish bets into the 1.0380 level next.

EURUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have an upward trendline defining the bullish momentum.
If we get a pullback into the trendline, we can expect the buyers to lean on it
with a defined risk below it to position for a rally into the 1.06 handle. The
sellers, on the other hand, 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 a minor upward trendline defining the bullish momentum on this
timeframe. On an intraday basis, we can expect the buyers to lean on the
trendline to position for a rally into the 1.06 handle, while the sellers will
look for a break lower to extend the pullback into the 1.0445 level next. The
red lines define the average daily range for today.

Upcoming
Catalysts

Today we conclude the week with the US
Flash PMIs.

This article was written by Giuseppe Dellamotta at www.forexlive.com.