Fundamental Overview
The USD continues to lose ground as the tariffs fears ease. In fact, tonight Trump said that he would rather not use tariffs on China which triggered more weakness in the greenback.
The tariffs risk has been the only thing keeping a bid under the US Dollar after the US inflation data, so when that risk eases, the greenback weakens.
On the EUR side, the latest PMIs showed an encouraging rebound in activity which triggered a repricing in rate cuts expectations. The market now sees a total of 86 bps of easing by year end which is down from 97 bps before the data release.
EURUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that EURUSD broke above a key resistance zone around the 1.0450 level confirming the change in trend. The buyers piled in more aggressively to position for a rally into the 1.06 handle next. The sellers, on the other hand, will want to see the price falling back below the 1.0450 level to target a pullback into the 1.0350 level next.
EURUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have an upward trendline defining the current bullish momentum. If we get a pullback into the trendline, the buyers will likely lean on it to keep pushing into new highs, while the sellers will look for a break lower to increase the bearish bets into the 1.0350 level.
EURUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have another minor upward trendline defining the bullish momentum on this timeframe. The buyers will keep on leaning on the trendline to position for further upside, while the sellers will look for a break lower to target the next trendline. The red lines define the average daily range for today.
Upcoming Catalysts
Todaywe conclude the week with the Flash US PMIs.
This article was written by Giuseppe Dellamotta at www.forexlive.com. Read More Details
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