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 US Jobless Claims beat
  expectations across the board.
• The latest US Manufacturing
  PMI
  beat expectations while the Services PMI missed slightly. Both the measures
  remain in expansion though.
• 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 sold off
into the weekend as the US data surprised once again to the upside. The trend
might have changed as the price continues to print lower lows and lower highs
with the moving averages being
crossed to the downside. The price bounced on the 1.08 handle as the selloff
got 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 –
4 hour Timeframe

On the 4 hour chart, we can see that the pair
bounced on a key support around
the 1.08 handle and it’s now at the 38.2% Fibonacci retracement level.
This is where we can expect the sellers to step in with a defined risk above
the Fibonacci level to position for a drop back into the 1.08 support targeting
a break below it. The buyers, on the other hand, will want to see the price
breaking higher to increase the bullish bets into the 1.10 handle.

EURUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the key levels marked on the chart. We now have a counter-trendline and
the red 21 moving average giving support for the buyers. If we were to get a
pullback, the buyers will likely lean on the trendline 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 have the US Durable Goods Orders and the US
Consumer Confidence report. Tomorrow, we have Fed’s Waller speaking. On
Thursday, we get the latest US Jobless Claims figures, while on Friday we
conclude with the US PCE and Fed Chair Powell.

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