EURUSD Technical Analysis – Some consolidation ahead of the US inflation data
Fundamental OverviewThe USD has been under some pressure in the last couple of weeks as the weaker US data and the selloff in the US stock market increased the expectations for more easing by year-end with the market now fully pricing in three rate cuts. Today we get the US CPI report and it could be a tricky one for the US Dollar. Logically one would expect more weakness for the greenback in case we get a soft report, but we might even see a counterintuitive short-term appreciation on a relief rally in equities. A hot report, on the other hand, might give the greenback a boost against the major currencies on risk-off flows although even here we could see the US Dollar depreciating amid falling long term Treasury yields with the market expecting the Fed holding off from cutting even in the face of more economic slowdown and eventually leading to more aggressive cuts. On the EUR side, the market recently scaled back the rate cuts expectations following the news of more defence spending. The European yields spiked and boosted the Euro. Moreover, the ECB speakers have been coming a bit less dovish recently as they’ve been cautioning against cutting rates too fast. EURUSD Technical Analysis – Daily TimeframeOn the daily chart, we can see that the EURUSD is testing the key swing level at 1.0933. This is where we can expect the sellers to step in with a defined risk above the level to position for a pullback into the 1.0630 level. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into new highs.EURUSD Technical Analysis – 4 hour TimeframeOn the 4 hour chart, we can see that the pair is trading inside a rising channel. The buyers will likely lean on the lower bound to keep pushing into new highs, while the sellers will look for a break lower to target the base of the channel around the 1.0765 level next.EURUSD Technical Analysis – 1 hour TimeframeOn the 1 hour chart, there’s not much else we can add here as the buyers will want to lean on the bottom trendline to position for new highs, while the sellers will look for a break lower to target the 1.0765 level next. Today we have the US CPI report so from a risk management perspective, it would be better to wait for the release before taking new positions. The red lines define the average daily range for today. Upcoming CatalystsToday we have the US CPI report. Tomorrow, we get the US PPI data and the US Jobless Claims figures. On Friday, we conclude the week with the University of Michigan Consumer Sentiment report. This article was written by Giuseppe Dellamotta at www.forexlive.com.
Fundamental Overview
The USD has been under some pressure in the last couple of weeks as the weaker US data and the selloff in the US stock market increased the expectations for more easing by year-end with the market now fully pricing in three rate cuts.
Today we get the US CPI report and it could be a tricky one for the US Dollar. Logically one would expect more weakness for the greenback in case we get a soft report, but we might even see a counterintuitive short-term appreciation on a relief rally in equities.
A hot report, on the other hand, might give the greenback a boost against the major currencies on risk-off flows although even here we could see the US Dollar depreciating amid falling long term Treasury yields with the market expecting the Fed holding off from cutting even in the face of more economic slowdown and eventually leading to more aggressive cuts.
On the EUR side, the market recently scaled back the rate cuts expectations following the news of more defence spending. The European yields spiked and boosted the Euro. Moreover, the ECB speakers have been coming a bit less dovish recently as they’ve been cautioning against cutting rates too fast.
EURUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that the EURUSD is testing the key swing level at 1.0933. This is where we can expect the sellers to step in with a defined risk above the level to position for a pullback into the 1.0630 level. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into new highs.
EURUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the pair is trading inside a rising channel. The buyers will likely lean on the lower bound to keep pushing into new highs, while the sellers will look for a break lower to target the base of the channel around the 1.0765 level next.
EURUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, there’s not much else we can add here as the buyers will want to lean on the bottom trendline to position for new highs, while the sellers will look for a break lower to target the 1.0765 level next. Today we have the US CPI report so from a risk management perspective, it would be better to wait for the release before taking new positions. The red lines define the average daily range for today.
Upcoming Catalysts
Today we have the US CPI report. Tomorrow, we get the US PPI data and the US Jobless Claims figures. On Friday, we conclude the week with the University of Michigan Consumer Sentiment report. This article was written by Giuseppe Dellamotta at www.forexlive.com.
