EURUSD Technical Analysis – The pair is challenging the 2024 low
Fundamental Overview . . The USD got a boost from the FOMC decision as the market perceived it as more hawkish than expected. Overall, apart from some slight tweaks, the Fed matched the market’s ...
FundamentalOverview
The USD got a boost fromthe FOMC decision as the market perceived it as morehawkish than expected. Overall, apart from some slight tweaks, the Fed matchedthe market’s pricing. Nonetheless, the market reacted in a big way pushingTreasury yields higher and giving the USD a tailwind.
The data is what reallymatters now as it will decide what the Fed is going to do. They switched theirfocus on inflation again, so it will likely take just one soft CPI report inJanuary to see the market reacting in a dovish way sending Treasury yields andthe US Dollar lower.
On the EUR side, the ECB cut interest rates by 25 bps as expectedrecently. The central bank removed the line saying it will keep policy ratessufficiently restrictive for as long as necessary. The market is pricing a 95%chance for the ECB to cut by 25 bps in January and deliver a total of 113 bpsof easing by the end of 2025.
EURUSD TechnicalAnalysis – Daily Timeframe
On the daily chart, we cansee that EURUSD broke out of the range between the 1.0450 supportand 1.0610 resistance following the FOMC decision. The price is now consolidatingnear the 2024 low at 1.0335. This is where the buyers are stepping in with adefined risk below the level to position for a pullback into the major trendline.The sellers, on the other hand, will want to see the price breaking lower toincrease the bearish bets into new lows.
EURUSD TechnicalAnalysis – 4 hour Timeframe
On the 4 hour chart, we cansee more clearly the spike lower on the FOMC decision and the consolidationnear the 2024 low. From a risk management perspective, the sellers will have abetter risk to reward around the supportnow turned resistance at 1.0450. The buyers, on the other hand, will wantto see the price breaking higher to increase the bullish bets into thetrendline.
EURUSD TechnicalAnalysis – 1 hour Timeframe
On the 1 hour chart, there’snot much else we can add here as the buyers will look for a pullback into the1.0450 level, while the sellers will look for a break below the 2024 low. Thered lines define the average daily range for today.
UpcomingCatalysts
Today, we conclude the week with the US PCE data.
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