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.
• 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 NFP beat expectations across the board
  although the average hourly earnings came in line with forecasts.
• The US ISM Manufacturing PMI beat expectations by a big margin with
  the prices component continuing to increase, while the US ISM Services PMI missed with the price index dropping to
  the lowest level in 4 years.
• There’s now basically a 50/50 chance of a 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 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 got
rejected recently by the trendline where we
can also find the confluence of the
61.8% Fibonacci retracement level
and the red 21 moving average. This is
a very strong resistance zone that the buyers will need to break to increase
the bullish bets into the 1.10 handle. The sellers, on the other hand, should
pile in around these levels to position for a drop into new lows target a break
below the key 1.0723 level.

EURUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see more closely the resistance
zone around the 1.0870 level and we can also notice that the latest leg higher diverged with the
MACD. This is
generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, it might be another bearish signal, although the price
will need to break below the upward trendline to confirm it.

EURUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
have a support zone
around the 1.00845 level where we can also find the confluence of the upward
trendline and the 4-hour 21 moving average. This is where we can expect the
buyers to step in with a defined risk below the support 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 get the US CPI report and the FOMC Minutes.
Tomorrow, we will have the ECB Rate Decision, the US PPI and the latest US
Jobless Claims figures. On Friday, we conclude the week with the University of
Michigan Consumer Sentiment Survey.

See the video below

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