EURUSD Technical Analysis

USD

• The Fed left interest rates unchanged as expected at the last meeting with basically no
  change to the statement. The Dot Plot still showed three rate cuts for 2024 and
  the economic projections were upgraded with growth and inflation higher and the
  unemployment rate lower.
• The US Q1 GDP
  surprisingly missed expectations although the core components showed a strong
  economy, nonetheless. The Core PCE though surprised to the upside pushing rate
  cuts further away.
• The US CPI beat expectations for the third
  consecutive month, while the US PPI came in line with forecasts.
• The US NFP beat expectations across the board
  although the average hourly earnings came in line with forecasts.
• The US PMIs missed expectations in April with the
  commentary citing lower inflationary pressures but also increased layoffs.
• The market expects the first rate cut in September.

EUR

• The ECB left interest rates unchanged as
  expected and opened the door for a rate cut in June.
• The recent Eurozone CPI missed
  expectations.
• The labour market remains historically tight with
  the unemployment rate hovering at record lows.
• The latest Eurozone PMIs beat
  expectations on the Services side while the Manufacturing one missed dropping
  further in contraction.
• The market expects the ECB to cut rates in June.

EURUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that EURUSD broke
through the key 1.07 resistance and it’s
now getting rejected by the confluence of the
50% Fibonacci retracement level
and the red 21 moving average. This is
where the sellers are stepping in with a defined risk above the Fibonacci level
to position for a drop into new lows. The buyers, on the other hand, will want
to see the price breaking higher to increase the bullish bets into the major trendline.

EURUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the recent price
action might have formed a bearish flag,
although the price will need to break below the bottom trendline to confirm it.
The price is struggling right at the upper bound of the flag as the sellers
continue to pile in to position for a drop into new lows. A breakout to the
upside would invalidate the bearish flag and give the buyers clear way to
target the major trendline around the 1.08 handle.

EURUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent price action and we can notice that we have another
important zone around the 1.0690 level where we can find the confluence of the
previous resistance now
turned support, the minor black trendline and the 4-hour
21 moving average. If we get a pullback into the trendline, we can expect the
buyers to lean on it with a defined risk below the 1.0690 zone to position for
a rally into new highs. The sellers, on the other hand, will want to see the
price breaking lower to increase the bearish bets into new lows.

Upcoming Events

Today we conclude the week with the US PCE report.

This article was written by FL Contributors at www.forexlive.com.