USD

  • The Fed left interest rates unchanged as expected at the last meeting and dropped the tightening bias in the statement.
  • The US PCE came in line with expectations.
  • The US Jobless Claims missed expectations although the data is still in the recent ranges.
  • The latest US ISM Manufacturing PMI missed expectations by a big margin.
  • The US Consumer Confidence missed expectations across the board.
  • The market expects the first rate cut in June.

EUR

  • The ECB left interest rates unchanged as expected at the last meeting maintaining the usual data dependent language.
  • The Eurozone CPI beat expectations.
  • The labour market remains historically tight with the unemployment rate hovering at record lows.
  • The latest Eurozone PMIs beat expectations on the Services side with the measure jumping back into expansion while the Manufacturing one missed dragged lower by Germany’s performance.
  • The market expects the ECB to cut rates in June.

EURUSD Technical Analysis – Daily Timeframe

EURUSD Technical Analysis
EURUSD Daily

On the daily chart, we can see that EURUSD recently got rejected around the 1.09 handle as the sellers stepped in with a defined risk above the level to position for a drop into new lows. The price bounced on the red 21 moving average as the buyers leant on it to position for another rally and target the 1.10 handle.

EURUSD Technical Analysis – 4 hour Timeframe

EURUSD Technical Analysis
EURUSD 4 hour

On the 4 hour chart, we can see that the price bounced on the key support zone around the 1.08 handle as the buyers continue to defend the level and position for the rally into the 1.10 handle. The pair has been ranging for a couple of weeks, but the bias remains skewed to the upside. The buyers will need the price to break above the recent resistance at 1.0866 to increase the bullish bets and target a break above the 1.09 handle. The sellers, on the other hand, will want to see the price breaking below the key support to invalidate the bullish setup and position for a selloff into the lows.

EURUSD Technical Analysis – 1 hour Timeframe

EURUSD Technical Analysis
EURUSD 1 hour

On the 1 hour chart, we can see more closely the recent price action and we can notice that we have a key zone around the 1.0835 level where the price reacted to several times in the last couple of weeks. This is where we can expect the buyers to step in with a defined risk below the zone to position for a rally into the 1.09 handle and target a breakout. The sellers, on the other hand, will want to see the price breaking lower to pile in and position for a drop into the 1.08 support targeting a break below it.

Upcoming Events

This week we have lots of important events on the agenda with the release of the US labour market data and the Fed Chair Powell testifying to Congress. We begin today with the US ISM Services PMI. Tomorrow, we have the US ADP, the US Job Openings and the Fed Chair Powell speaking. On Thursday, we have the ECB rate decision and later in the day, we will get the latest US Jobless Claims figures. On Friday, we conclude the week with the US NFP report.