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 Jobless Claims beat expectations last week.
  • The US ISM Manufacturing PMI beat expectations by a big margin with the prices component continuing to increase.
  • The US Consumer Confidence missed expectations although the labour market details improved.
  • The market now sees basically a 50/50 chance of a 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

EURUSD Technical Analysis
EURUSD Daily

On the daily chart, we can see that EURUSD recently broke below the 1.08 support following strong US data. The price bounced on the key 1.0723 level and it’s now approaching the 1.08 support turned resistance where we can also find the blue 8 moving average for confluence. This is where we can expect the sellers to step in with a defined risk above the resistance to position for a break below the 1.0723 level. 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 – 4 hour Timeframe

EURUSD Technical Analysis
EURUSD 4 hour

On the 4 hour chart, we can see more closely the resistance around the 1.08 handle where we can also find the 38.2% Fibonacci retracement level for confluence. If the price were to get there, we can expect the sellers to step in to position for the break of the 1.0723 level. The buyers will need to break above this resistance to invalidate the bearish setup and start targeting new highs.

EURUSD Technical Analysis – 1 hour Timeframe

EURUSD Technical Analysis
EURUSD 1 hour

On the 1 hour chart, we can see that we have a minor support zone around the 1.0760 level where we can find the confluence of the 38.2% Fibonacci retracement level and the red 21 moving average. This is where we can expect the buyers to step in with a defined risk below the level to position for a break above the resistance with a better risk to reward setup. 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 Eurozone CPI and later in the day, the US ADP and the US ISM Services PMI. Tomorrow, we get the latest US Jobless Claims figures while on Friday we conclude the week with the US NFP report.

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