Fundamental Overview

Last Thursday, the USD weakened across the board following the weak US jobless claims figures where initial claims spiked to the highest level since August 2023. Now, jobless claims are notoriously volatile, so that could have been just a blip, but the weak consumer sentiment report on Friday could be another supporting signal for economic weakness ahead, although the data might have been skewed more by inflation worries. Overall, in the short-term it wasn’t a real gamechanger and the next trend will likely be set by the US CPI report due on Wednesday where hot data should send the pair lower while soft figures could trigger a rally into the 1.10 handle.

EURUSD Technical Analysis – Daily Timeframe

EURUSD Technical Analysis

On the daily chart, we can see that EURUSD is trading right around the key trendline near the 1.08 handle. This is where we can expect the sellers to step in with a defined risk above the 1.08 level to position for a drop into the 1.05 handle. The buyers, on the other hand, will want to see the price breaking to the upside to start targeting the 1.09 handle and eventually the 1.10 level.

EURUSD Technical Analysis – 1 hour Timeframe

EURUSD Technical Analysis
EURUSD 1 hour

On the 1 hour chart, we can see that we have kind of a range between the 1.0760 support and the 1.0800 resistance. Given the lack of key economic releases today, we can expect a rangebound price action until the key US data in the next couple of days. A break above the 1.08 resistance supported by the data, should lead to a sustained rally into new highs. Conversely, a break below the 1.0727 level will likely take us to new lows with the 1.05 handle as the next target.

Upcoming Catalysts

This week all eyes will be on the US CPI report due on Wednesday, but we will have other notable releases throughout the week. We begin tomorrow with the US PPI and Fed Chair Powell speech. On Wednesday, we get the US CPI report and the US Retail Sales data. On Thursday, the focus will be on the latest US Jobless Claims figures to see whether the last week’s numbers were the start of a trend or just a fluke.

See the video below