Fundamental
Overview
The USD got a boost yesterday
from another set of hot data as the US
Job Openings surprised to the upside and the prices paid index in the ISM
Services PMI jumped to the highest level since 2023.
The market’s pricing didn’t
change much but traders no longer fully price in the next rate cut before July.
The US CPI report next week remains a key catalyst that will influence greatly
the market’s pricing.
On the EUR side, the
Eurozone CPI yesterday came in line with forecasts although the Core measure
remains pretty sticky around 2.7%. As a reminder, the ECB cut the
policy rate by 25
bps at the last decision bringing it to 3.00%.
The central bank removed
the passage saying that “it will keep policy rates sufficiently restrictive for
as long as necessary” implying that upside inflation risks have faded. The
market sees a 93% probability of a rate cut at the upcoming meeting and a total
of 100 bps of easing by year end.
EURUSD Technical
Analysis – Daily Timeframe
EURUSD Daily
On the daily chart, we can
see that EURUSD erased the entire Christmas period drop, but it’s now back on
its way toward the lows. The break below the 1.0332 level should see more
sellers piling in for a move into the 1.0222 low. The buyers, on the other
hand, will want to see the price rising back above the 1.0332 level to position
for a pullback into the 1.0450 level again.
EURUSD Technical
Analysis – 4 hour Timeframe
EURUSD 4 hour
On the 4 hour chart, we can
see that overall the price action has been pretty rangebound but the bearish
momentum remained in place nonetheless. For now, the break below the 1.0332
level opened the door for another test of the 1.0222 low, so the buyers will
look for the price to rally back above the 1.0332 level or some catalyst before
piling in with more conviction.
EURUSD Technical
Analysis – 1 hour Timeframe
EURUSD 1 hour
On the 1 hour chart, there’s
not much else we can add here as the sellers will keep on targeting the lows, while
the buyers will look for a rally back above the 1.0332 level to target the
1.0450 resistance next. The red lines define the average daily range for today.
Upcoming
Catalysts
Today, we have Fed’s Waller speaking, the US ADP and the FOMC Minutes. Tomorrow,
we get the latest US Jobless Claims figures. On Friday, we conclude the week
with the US NFP report.
