Fundamental
Overview
Last Thursday, the
USD weakened across the board following the weak US
jobless claims figures where initial claims spiked to the highest level
since August 2023. Now, jobless claims are notoriously volatile, so that could
have been just a blip, but the weak consumer
sentiment report on Friday could be another supporting signal for economic weakness
ahead, although the data might have been skewed more by inflation worries.
Overall, in the short-term it wasn’t a real gamechanger and the next trend will
likely be set by the US CPI report due on Wednesday where hot data should send
the pair lower while soft figures could trigger a rally into the 1.10 handle.
EURUSD
Technical Analysis – Daily Timeframe
EURUSD Daily
On the daily
chart, we can see that EURUSD is trading right around the key trendline
near the 1.08 handle. This is where we can expect the sellers to step in with a
defined risk above the 1.08 level to position for a drop into the 1.05 handle.
The buyers, on the other hand, will want to see the price breaking to the
upside to start targeting the 1.09 handle and eventually the 1.10 level.
EURUSD Technical
Analysis – 1 hour Timeframe
EURUSD 1 hour
On the 1 hour chart,
we can see that we have kind of a range between the 1.0760 support
and the 1.0800 resistance. Given the lack of key economic releases today, we
can expect a rangebound price action until the key US data in the next couple
of days. A break above the 1.08 resistance supported by the data, should lead
to a sustained rally into new highs. Conversely, a break below the 1.0727 level
will likely take us to new lows with the 1.05 handle as the next target.
Upcoming
Catalysts
This week all eyes will be on the US CPI report due on
Wednesday, but we will have other notable releases throughout the week. We
begin tomorrow with the US PPI and Fed Chair Powell speech. On Wednesday, we
get the US CPI report and the US Retail Sales data. On Thursday, the focus will
be on the latest US Jobless Claims figures to see whether the last week’s numbers
were the start of a trend or just a fluke.
