Fundamental Overview

The USD last week finished slightly positive but overall, it was a pretty flat week. We got some great US PMIs on Friday which showed growth without inflationary pressures. In fact, despite the strong PMIs the market pricing for interest rates remained unchanged. That should be positive for risk sentiment for the time being.

The EUR, on the other hand, got hit on Friday following the disappointing Eurozone PMIs, although the losses were erased this morning. The risk sentiment has been gradually improving, so we might see the greenback coming back under pressure if this were to persist.

EURUSD Technical Analysis – Daily Timeframe

EURUSD Technical Analysis

On the daily chart, we can see that EURUSD has been kind of rangebound around the 1.07 handle as the sellers have been struggling to get the bearish momentum going further. The 1.0727 remains a key level with the price trading below it being more bearish and above it more bullish.

EURUSD Technical Analysis – 4 hour Timeframe

EURUSD Technical Analysis
EURUSD 4 hour

On the 4 hour chart, we can see that we have a strong resistance zone around the 1.0727 level where we can also find the confluence of the trendline.

This is where we can expect the sellers to step in with a defined risk above the trendline to position for a drop into the 1.06 handle next. The buyers, on the other hand, will want to see the price breaking higher to pile in with more conviction and start targeting the 1.08 handle.

EURUSD Technical Analysis – 1 hour Timeframe

EURUSD Technical Analysis
EURUSD 1 hour

On the 1 hour chart, we can see that we have the upper limit of the average daily range for today standing right around the resistance. Therefore, it’s unlikely that we will see a breakout to the upside today but watch out for the next days as we get some important US data tomorrow and on Thursday.

Upcoming Catalysts

This week is a bit light on the data front although we will still get to see some important releases. We begin tomorrow with the US Consumer Confidence where the market will be focused on the labour market details. On Thursday, we get the latest US Jobless Claims figures, while on Friday we conclude the week with the US PCE.