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 ADP and the US Job Openings missed expectations.
- The latest US ISM Manufacturing PMI missed expectations by a big margin remaining in contraction with the US ISM Services PMI following suit but holding on in expansion.
- 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
On the daily chart, we can see that EURUSD probed above the 1.09 handle yesterday but failed to sustain the breakout as the sellers stepped in with a defined risk above it to position for a drop into the 1.0723 support. The trend for now remains bullish as the price continues to make higher highs and higher lows with the moving averages being crossed to the upside. The buyers will want to see the price breaking higher to invalidate the bearish setup and start targeting the 1.10 handle.
EURUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that from a risk management perspective, the buyers will have a much better risk to reward setup around the trendline where they will also find the confluence of the 61.8% Fibonacci retracement level and the daily 21 moving average. The sellers, on the other hand, will want to see the price breaking below the trendline to invalidate the bullish setup and increase the bearish bets into the 1.0723 support.
EURUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the buyers have another strong support zone around the 1.0870 where we can find the confluence of the previous resistance turned support, the minor trendline, the 61.8% Fibonacci retracement level and the 4-hour 21 moving average. This is where we can expect the buyers to step in with a defined risk below the trendline to position for a break above the 1.09 level and target the 1.10 handle. The sellers, on the other hand, will want to see the price breaking lower to invalidate this bullish setup and position for a drop into the major trendline.
Upcoming Events
Today we have the ECB rate decision and the US Jobless Claims figures, while tomorrow we conclude the week with the US NFP report.
