EURUSD Technical Analysis – The focus switches to the US PMIs
Fundamental Overview . . The US Dollar this week has been erasing some of the losses experienced last week after the benign US PPI and the Trump’s reciprocal tariffs announcement.
FundamentalOverview
The US Dollar this week hasbeen erasing some of the losses experienced last week after the benign US PPIand the Trump’s reciprocal tariffs announcement. There hasn’t been any notablecatalyst this week to support the greenback although some analysts pointed toless dovish comments from Fed’s Waller on Tuesday which would explain the risein Treasury yields afterwards.
Yesterday, during the Asiansession we got some positive headlines on the tariffs side as Trump said that anew trade deal with China was possible. That weakened the US Dollar whichcontinued to depreciate throughout the European and US sessions.
On the EUR side, today wegot the Eurozone PMIs today which showed steady growthwith another pick up in the manufacturing index, which is more sensitive to thebusiness cycles. Earlier in the session, we got a poor reading from Francewhich weighed on the euro as the market pricing for the ECB increased to 80 bpsof easing by year-end.
Those expectations easedafter better data from Germany PMIs and Eurozone PMIs though. The baselineexpectation remains for three more rate cuts.
EURUSD TechnicalAnalysis – Daily Timeframe
On the daily chart, we cansee that the EURUSD is trading between the 1.0532 resistance and the 1.0450 support. The buyers willlikely step in around the support to position for a rally into the 1.06 handle.The sellers, on the other hand, will look for a break below the support toincrease the bearish bets into the 1.0380 level next.
EURUSD TechnicalAnalysis – 4 hour Timeframe
On the 4 hour chart, we cansee that we have an upward trendline defining the bullish momentum.If we get a pullback into the trendline, we can expect the buyers to lean on itwith a defined risk below it to position for a rally into the 1.06 handle. Thesellers, on the other hand, will look for a break lower to increase the bearishbets into new lows.
EURUSD TechnicalAnalysis – 1 hour Timeframe
On the 1 hour chart, we cansee that we have a minor upward trendline defining the bullish momentum on thistimeframe. On an intraday basis, we can expect the buyers to lean on thetrendline to position for a rally into the 1.06 handle, while the sellers willlook for a break lower to extend the pullback into the 1.0445 level next. Thered lines define the average daily range for today.
UpcomingCatalysts
Today we conclude the week with the USFlash PMIs.
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