EURUSD Technical Analysis

USD

• The Fed left interest rates unchanged as
  expected 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.
• Fed Chair Powell
  maintained a neutral stance as he said that it was premature to react to the
  recent inflation data given possible bumps on the way to their 2% target.
• The US CPI and
  the US PPI beat
  expectations for the second consecutive month.
• The NFP report beat
  expectations on the headline number, but the unemployment rate and the average
  hourly earnings missed notably. Moreover, the US Jobless Claims beat
  expectations across the board with a big positive revision to Continuing
  Claims.
• The latest US ISM
  Manufacturing PMI missed expectations by a big margin
  remaining in contraction with the US ISM Services
  PMI
  following suit but holding on in expansion.
• The US Retail Sales missed
  expectations across the board although the data improved from the prior month.
• The market expects the first rate cut in June.

EUR

• The ECB left interest rates unchanged as
  expected at the last meeting revising inflation and growth expectations
  downwards and maintaining the usual data dependent language.
• The recent Eurozone CPI beat
  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 invalidated
the bearish setup as the price rallied back above the trendline and the
1.09 handle following the FOMC decision. The buyers will now look for
dip-buying opportunities to keep targeting the 1.10 handle. The sellers, on the
other hand, will want to see the price breaking back below the 1.09 handle to
position for a drop into the 1.0723 support.

EURUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we had the confluence of the
downward trendline and the red 21 moving average that
were defining the downtrend. This got invalidated as the price broke above the
levels and even rose above the 1.09 resistance. The price was a bit
overstretched as depicted by the distance from the blue 8 moving average. In
such instances, we can generally see a pullback into the moving average or some
consolidation before the next move.

EURUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
now have a strong support zone around the 1.09 handle where we can find the
confluence of the 38.2% Fibonacci
retracement level, the red 21 moving average and the
4-hour 8 moving average. This is where we can expect the buyers to step in with
a defined risk below the support to position for a rally into the 1.10 handle.
The sellers, on the other hand, will want to see the price breaking lower to
position for a drop into the 1.0723 level.

Upcoming Events

Today we have some key economic data on the agenda
with the release of the latest US Jobless Claims
figures and the US PMIs.

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