Fundamental
Overview
The USD weakened across the
board last Friday following the soft US NFP report. The data showed some more labour
market cooling with an increase in the unemployment rate and a decrease in wage
growth. We basically have an economy that is slowing but still growing. The
market seems to be taking it as good news as it still expects a soft landing.
The EUR, on the other hand,
gained last week against the US Dollar mainly because of the risk-on sentiment
as the US data continued to support at least two rate cuts from the Fed but
didn’t send recessionary signals. On the monetary policy front, the ECB members
continue to repeat that they will wait for the data throughout summer before
deciding on a rate cut in September.
EURUSD Technical
Analysis – Daily Timeframe
EURUSD Daily
On the daily chart, we can
see that EURUSD eventually extended the rally above the 1.08 handle and it’s
now targeting the resistance
around the 1.0885 level. That’s where we can expect the sellers to step in to
position for a drop back into the 1.0812 support. The buyers, on the other
hand, will want to see the price breaking higher to increase the bullish bets into
the 1.10 handle next.
EURUSD Technical
Analysis – 4 hour Timeframe
EURUSD 4 hour
On the 4 hour chart, we can
see that from a risk management perspective, the buyers will have a better risk
to reward setup around the 1.0812 support where we can also find the trendline for confluence. The sellers, on the other hand,
will want to see the price breaking lower to turn the bias more bearish and position
for a drop into the 1.0727 level next.
EURUSD Technical
Analysis – 1 hour Timeframe
EURUSD 1 hour
On the 1 hour chart, we can
see more clearly the recent price action with the bounce on the 1.0812 level
and the continuation of the uptrend. Today we get the US CPI and the US Jobless
Claims figures, so we might see a spike either into the 1.0885 resistance or
the trendline. The red lines define the average daily range for today.
Upcoming
Catalysts
Today is the most important day of the week as we get the US CPI and the US
Jobless Claims figures. Tomorrow, we conclude the week with the US PPI and the
University of Michigan Consumer Sentiment survey.
