EURUSD Analaysis

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EURUSD

Fundamental Outlook: The European Central Bank is expected to announce another interest rate hike on Thursday, but the recent turmoil in global bank stocks has made the outlook less certain. In February, there was an unexpected increase in underlying inflation, which caused policymakers to worry that inflationary pressures might persist. However, the uncertainty in the U.S. banking sector has created concerns about potential contagion in Europe. As a result, confidence in a significant 50 basis point interest rate hike has diminished.

Technical Analysis: After three consecutive days of strong uptrend, the pair faced a barrier at 1.0750 and pulled back. However, the formation of a double bottom pattern suggests a target of 1.0800. To achieve this, the pair needs to break through the 1.0750 resistance level first. The current pullback may continue until the double bottom resistance is broken, where a retest is possible. If the decline persists, the support level to watch is at 1.0650.

Support: 1.0650 - 1.0600 – 1.0525
Resistance: 1.0750 – 1.0780 – 1.0835

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EURUSD

Fundamental Outlook: According to the chief economist of the European Bank for Reconstruction and Development, Beata Javorcik, market predictions of interest rate cuts in central Europe are overly optimistic due to the possibility of inflation remaining higher than expected. Despite the slowdown of the region, caused by the fallout from the conflict in Ukraine, rate-setters in central Europe, who led the global monetary tightening trend in 2021, are currently focused on maintaining stable rate policies.

Technical Analysis : After four consecutive days of strong uptrend, the pair faced a barrier at 1.0760 and pulled back. The parity is trading above the 50- day exponential moving averages currently and it is important to stay above that level for further increases. However, the formation of a double bottom pattern suggests a target of 1.0800. To achieve this, the pair needs to break through the 1.0760 resistance level first. The current pullback may continue until the double bottom resistance is broken, where a retest is possible. If the decline persists, the support level to watch is at 1.0650.

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EURUSD
Fundamental Outlook: The European Central Bank (ECB) policymakers are scheduled to hold a meeting on Thursday. However, given the turmoil in the financial markets, the ECB might need to deviate from its plans to execute another significant interest rate hike, despite persistently high inflation. On Thursday, Barclays stated that it is more probable for the European Central Bank (ECB) to increase interest rates by 25 basis points, rather than 50 basis points or not at all when it meets on Thursday.

Technical Analysis: In the technical analysis today, the focus is on the European central bank’s interest rate decision and its impact on the currency pair. Volatility is expected to remain high, with the euro showing a relatively calm trend ahead of the announcement.

Yesterday’s sharp fall has left the euro struggling to surpass the 50-day moving average over the past three days, indicating strong resistance in this area. Unless the currency can close above the 1.0725 level, any upward movements may be limited. It is, however, positive that the euro has not fallen below the 200-day exponential moving average, which can be seen as a potential support level.

Overall, the technical analysis suggests that the current resistance zone will be a key factor in determining the currency’s direction in the short term, with traders closely monitoring the support level at 1.0550.

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EURUSD
Fundamental Outlook: Goldman Sachs has recently commented that despite the current volatility in financial markets, the European Central Bank (ECB) will continue its tightening mode. However, the bank has revised its expectation for the peak of the ECB policy rate, lowering it from 3.75% to 3.50%. Goldman Sachs also predicts that core inflation in Europe will remain high in the near future and expects annual inflation to reach 5.8% in March.

Technical Analysis : The currency pair has been trading within a horizontal channel, with the 50-day moving average acting as a strong resistance and the 200-day exponential moving average providing reliable support. Recently, the pair has bounced off the support level of the channel for the third time, indicating a bullish sentiment in the market. Currently, the pair is attempting to break through the 8-day exponential moving average. Traders should keep an eye on the 1.0680 level, which is a critical resistance level in the short term. If the pair manages to close above 1.0725, it may attract further buying interest from traders.

Support: 1.0610 - 1.0575 – 1.0540
Resistance: 1.0680 – 1.0695 – 1.0725

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EURUSD
Fundamental Outlook: Two senior executives involved in the discussions have informed Reuters that at least two major banks in Europe are assessing the possibility of contagion within the banking sector of the region. These banks are seeking stronger indications of support from both the Federal Reserve and the European Central Bank to help deal with any potential fallout.

Technical Analysis : The currency pair has been consolidating within a range-bound market, where the 50-day moving average has acted as a significant barrier, while the 200-day exponential moving average has acted as a reliable support. The pair has recently rebounded off the channel’s support level for the third time, indicating a bullish market sentiment. Currently, the pair is attempting to test the 8-day exponential moving average, which may provide short-term resistance. Forex traders should monitor the 1.0685 level closely, as it is a crucial resistance level in the near term. If the pair manages to close above the 1.0725 level, it may attract further buying interest from traders. Conversely, if the pair falls below the 1.0610 support level, it may signal further weakness in the market.

Support: 1.0610 - 1.0575 – 1.0540
Resistance: 1.0685 – 1.0710 – 1.0725

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EURUSD

Fundamental Outlook: Goldman Sachs revised its economic growth projection for the eurozone in 2023, citing persistent turmoil in the global banking system and rising economic uncertainty. The investment bank lowered its growth forecast for the region by 0.3%, resulting in a projected GDP growth rate of 0.7% for 2023.

Technical Analysis : The currency pair is experiencing difficulties in breaking above the 50-day moving average and seems to be encountering a barrier at this point once more. This is indicated by the purple line on the chart. However, the 200-day exponential moving average, represented by the yellow line, is providing support from below. Additionally, the 1.0685 level can be considered as a support level. On the other hand, if the pair manages to surpass the 1.0725 level, it will be viewed as a critical resistance level and closely monitored.
Support: 1.0685 – 1.0660 – 1.0605
Resistance: 1.0725 – 1.0760 – 1.0775

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EURUSD
Fundamental Outlook: Lagarde highlighted that the ECB remains committed to its goal of combating inflation and that any market turbulence will not hinder this objective. In fact, she suggested that such instability could potentially aid in achieving the ECB’s target. This statement was made in response to concerns expressed by investors and bankers about the likelihood of a financial crisis. Lagarde’s reference to the correlation between the increase of interest rates by central banks and apprehension within the banking industry was due to the fact that both tend to result in reduced lending and hindered economic growth.

Technical Analysis: Based on technical analysis, the Euro has risen above the level where it started to decline with positive bars for four consecutive days after a sharp fall on March 15. Additionally, the 50-day moving average is also positive, indicating a potential bullish sentiment in the market.

However, traders should closely monitor the 1.0800 level as it may act as resistance and potentially push the Euro back down. On the downside, the 50-day moving average level, which was the previous resistance, could act as support at 1.0730.

Therefore, traders should keep a close eye on these key levels to identify potential trading opportunities and manage their risks accordingly. In summary, the technical analysis suggests a potential bullish outlook for the Euro, but traders should exercise caution and closely monitor the crucial levels.

Support: 1.0730 – 1.0685 – 1.0615
Resistance: 1.0800 – 1.0840 – 1.0890

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EURUSD
Fundamental Outlook: The pair continued to rise for 6 consecutive days by testing 1.0930, the highest level in the last month with the Fed’s rate hike. Janet Yellen assured that depositors in US banks would be insured, but said that poorly managed banks would not be bailed out. As Lagarde recently mentioned, the relationship between central banks’ raising interest rates and uneasiness in the banking sector has increased as both lead to reduced lending and hinder economic growth. This makes the pair stronger as DXY depreciates.
Technical Analysis: In a short term, the parity looks bullish because 21DMA crosses 50DMA yesterday. Also, the horizontal line around 1.0800/1.0810 area was broken. In addition, the Relative Strength Index (RSI) (14) is hovering in the bullish range 60.00-80.00, which shows more upside ahead. Technically, above 1.0850 level, the momentum is still bullish. The first resistance at 1.0930, then 1.1033 which is February high level.

Support: 1.0850 – 1.0800 – 1.0760
Resistance: 1.0930 – 1.1035 – 1.1100

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EURUSD

Fundamental Outlook: The euro managed to rebound above the 1.08 level as concerns about a global banking crisis and recession diminished, after First Citizens BancShares purchased all deposits and loans of Silicon Valley Bank on Monday. Meanwhile, investors are awaiting important Euro Area inflation data which is due to be released on Friday. It is anticipated that the euro will continue to strengthen against the US dollar, as the difference in policies between the European Central Bank and the US Federal Reserve is expected to widen.

Technical Analysis : The currency pair maintains its bullish momentum and has found support from the 8-day exponential moving average, as indicated by the red line on the chart. The pair attempted to breach the 1.0930 level but retreated to 1.0714, marking a minor pullback in the trend. Presently, the pair is trading above the crucial 0.618 Fibonacci retracement level, implying further bullish momentum. If the pair breaks above the resistance level at 1.0850, this may trigger more buying pressure and extend the uptrend. On the other hand, traders might watch for the 8-day exponential moving average at 1.0775, which could serve as a possible support level in case of a downside correction.

Support: 1.0775 – 1.0725 – 1.0675
Resistance: 1.0850 – 1.0885 – 1.0930

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EURUSD
Fundamental Outlook: The President of the European Central Bank (ECB), Christine Lagarde, has stated that the bank is resolute in its commitment to bring inflation back to its target, and this will not involve making trade-offs. Meanwhile, ECB board member Isabel Schnabel has suggested that the bank may explore novel methods to manage liquidity in the banking industry and guide short-term interest rates in the market. On the other hand, financial markets are pricing in a higher likelihood of the US Federal Reserve keeping rates unchanged in May and cutting them in July.

Technical Analysis: Today’s technical analysis shows that the Euro is currently on an upward trend, having distanced itself from the 8-day exponential moving average. It may come closer. The pair could find support in this region if it manages to remain on the rising trend. However, a trend break could result in a drop towards the 8 EMA. If this occurs, the support level to watch is at 1.0775, which also coincides with the 0.618 fibonacci level. On the other hand, in the short term, a resistance level of 1.0850 is significant and could pose a challenge for the pair to overcome.

Support: 1.0775 – 1.0725 – 1.0675
Resistance: 1.0850 – 1.0885 – 1.0930

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EURUSD
Fundamental Outlook: The latest inflation data from Germany indicates a significant easing in inflation in March, mainly driven by lower energy prices. Despite the decrease, the inflation rate still surpassed expectations, adding to the pressure on the European Central Bank to continue tightening its monetary policy. Inflation data for the wider Eurozone region is expected to be released today, and it is predicted that the inflation rate will decrease from 8.5% to 7.1% annually. This data is expected to be closely monitored by investors in the Euro currency.

Technical Analysis : The Euro has been displaying a consistent bullish trend, with consecutive positive bars. However, it recently faced a minor setback from its earlier high of 1.0930, and is now trading around this level. 1.0930 is a significant resistance level, and if it manages to break through it, the next potential target could be the 1.1000 levels observed in early February. Conversely, if a correction occurs, the levels of 1.0875 and 1.0840 could act as potential support levels.

Support: 1.0875 – 1.0840 – 1.0775
Resistance: 1.0930 – 1.0985 – 1.1030

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EURUSD
Fundamental Outlook: The pair jumped with the PM data announced yesterday and is currently trying to reach the highest level of the last 2 months with 1.0915 levels. The S&P Global Eurozone Manufacturing PMI of 47.3 in March 2023 was little changed from expectations of 47.1, but fell from the previous month’s 48.5, indicating that the possibility of a recession is on the table. Although the PMI data points to stagnation, it continues its search for a near-term peak with the jump it made with the data from the USA.

Technical Analysis: The Euro returned quickly from 1.0790 level and then tested above 1.0915. The area 1.0930/35 remains the key resistance level. Yet, the 21-DMA crosses the 50-DMA that indicates bullish trend. If the parity breaks that area, the next potential target could be 1.1035 level. Below, the 1.0795 (yesterday’s low level) may be support, then 1.0730.

Support: 1.0795 – 1.0730 – 1.0675
Resistance: 1.0930 – 1.1035 – 1.1055

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EURUSD
Fundamental Outlook: German factory orders will draw interest early in the session. Following the trade data from Tuesday, the numbers will need to impress. Economists forecast a 0.3% increase in February.

Later in the session, euro area member states and the Eurozone service and composite PMI numbers will also influence. Spain, Italy, and the Eurozone’s PMI numbers will likely garner the most interest. Investors should also consider ECB member speeches, with the economic calendar on the busier side. ECB Chief Economist Philip Lane will lecture at the University of Cyprus today.

Technical Analysis : The currency pair has continued to maintain its bullish momentum after breaking through the 1.0917 level, which had been holding steady since last week. This indicates that there may be further price advances, with the next significant resistance level being the 1.1020 level from the second week of February. However, this level may present a challenge for the pair, as it touches the 100MA solid level from the weekly chart.

On the support side, the 1.0917 level is expected to serve as a new solid support level in case of a retracement. Further down, the 1.0850 level represents a confluence point of the down parallel of the bullish channel and the 200MA, and may also provide support for the price.

Support: 1.0920 – 1.0860 – 1.0800
Resistance: 1.1020 – 1.1084 – 1.1185

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EURUSD
Following Tuesday breakout at around 1.0917, EURUSD experienced a correction after the release of the ISM Non-manufacturing PMI, leading the price towards 1.0886. This level is currently playing the role of a potential neck in a head and shoulders pattern, though it is not strong enough to be confirmed at present.

When the European Central Bank convenes in May, it is widely anticipated to continue its efforts to combat inflation, which remains at elevated levels, by raising interest rates.

During a Wednesday interview, ECB chief economist Philip Lane observed that the inflation pressure is perhaps most intense in the food sector, and that it is currently still increasing. He added that, although we have not yet reached the peak of food inflation, projections indicate a decline later in the year.

Today’s Initial Jobless Claims data may confirm continued contraction in the labor market, which has remained tight for the past two years. This data is being closely watched ahead of Friday’s release of the non-farm payroll report.

Although there was a minor correction in the bullish trend yesterday, the trend still appears to be intact. Additionally, the decline in DXY, which rejected the 102.05-point resistance and is currently trending downwards, may not continue.
Support: 1.0880– 1.0860 – 1.0800
Resistance: 1.0940 – 1.0970 – 1.1020

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EURUSD
Despite facing strong resistance, the EUR/USD pair managed to hold above 1.0880 and even climbed to 1.0940, signaling a bullish outlook. However, momentum appears to be fading, and the pair still faces significant resistance ahead. The daily chart shows the Euro holding firm above key Simple Moving Averages (SMA), which indicates a bullish stance, and traders are eyeing the 1.1000 level as the next target.

The long-term view still bullish and the higher highs movements still consistent indicating more advancement in price can happen if Data confirms.

Germany reported a 2% rise in Industrial Production in February on Thursday, following the 4.8% surge in Factory Orders released on Wednesday. In the US, the data showed that the Initial Jobless Claims had decreased to 228,000 after seasonal adjustments, indicating a softer labor market.

The upcoming NFP data on Friday is of great significance and is the only market driver until Tuesday. The general consensus is that March will see an increase of 240,000 jobs, with the unemployment rate staying at 3.6%. This has led to a decrease in expectations for another rate hike from the Federal Reserve (Fed) at the next meeting. The employment numbers are expected to have a significant impact on bonds, the US Dollar, and the equity market.

Support: 1.0880– 1.0860 – 1.0800
Resistance: 1.0940 – 1.0970 – 1.1020

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EURUSD

In mid-April, the euro was trading around $1.09, near its two-month high of $1.0973 reached earlier in the month. The European Central Bank’s (ECB) plan to raise interest rates to combat inflation supported the currency. However, there seems to be some uncertainty among ECB members regarding the rate hike. While ECB chief economist Philip Lane expressed the need for a rate hike in May, ECB member Klaas Knot is unsure if a 50-bps increase is necessary or if a 25-bps cutback is possible. The market is anticipating a 25 bps increase in the 3% deposit rate on May 4th, with another 25-bps move expected by mid-year.

Meanwhile, investors are also closely watching the US labor market, as the latest non-farm payroll report indicated a tight labor market and reinforced expectations of a 25-bps rate hike by the Federal Reserve in May.

The EUR/USD currency pair has formed a bearish descending triangle with support at the 1.0885 level. While the long-term bullish trend remains intact, the upcoming data releases from the US and EU this week could potentially break the price level either upwards or downwards. The next resistance levels for the pair are at 1.0940 and 1.0970, while support levels remain at 1.0885 and 1.0850.

Support: 1.0880– 1.0860 – 1.0800
Resistance: 1.0940 – 1.0970 – 1.1020

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EURUSD
Boosted by a weaker US Dollar, the pair climbed above 1.0900 and beyond ahead of crucial US economic data and amid expectations of another interest rate hike from the European Central Bank (ECB).

Tuesday’s release of Eurozone Retail Sales data showed a drop of 0.8% in March as expected, and the annual rate worsened to -3% from -1.8%, but it beat the consensus of -3.5%. The next important report for the region will be on Thursday with Industrial Production. Expectations of a 25-basis point rate hike at the May 4 meeting have been fueled by the ECB’s tightening stance. Federal Reserve’s Goolsbee mentioned the need to assess the potential impact of financial stress on the real economy while Williams said that they would have to lower interest rates if inflation comes down. Despite the rise in US yields, the US Dollar remained weak due to an improvement in risk sentiment. All eyes are now on the release of the March US Consumer Price Index on Wednesday, which is expected to show a 0.3% rise in CPI and a 0.4% increase in Core on a monthly basis. Later in the day, the Fed will publish the minutes of the latest FOMC meeting.

The EUR/USD rallied on Tuesday, reaching a high of 1.0927 before retracing slightly to find support above 1.0900. The immediate resistance level is at 1.0935, with a potential target of 1.0940. A break above this could see the pair testing the monthly high at 1.0970, and potentially even reaching the key psychological level of 1.1000. On the 4-hour chart, the Euro has immediate support at 1.0895, with further support at 1.0885 and 1.0860 below that. Despite recent losses, the daily chart still shows an overall bullish bias, with a break above 1.1000 needed to confirm this on the weekly chart where the 100MA is providing resistance at the same level.

Support: 1.0900– 1.0885 – 1.0860
Resistance: 1.0935 – 1.0970 – 1.1000

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EURUSD
The EUR/USD recorded its highest daily close since March 2022, marking its third consecutive daily gain on Thursday. The pair is striving for new higher levels of equilibrium as the rally continues, driven mainly by a weakening Dollar, and also by a stronger Euro.

The contrast between the outlooks of the Federal Reserve and the European Central Bank is reflected in the market pricing for future cuts and hikes. While the market has priced in another 50 basis points of hikes by the European Central Bank with no easing this year, the odds that the Fed may raise interest rates for the last time in May or stay on hold have increased following US data. The Producer Price Index (PPI) fell 0.5% in March, against expectations of a flat reading, while the Core PPI dropped 0.1%. Another report showed that Initial Jobless Claims for the week ended April 8 came in higher than expected, marking the highest level in months. More US economic data is due on Friday, including Retail Sales and Industrial Production.

The spread between U.S. 10-year yields and German bunds has narrowed to its smallest in two years, at around 100 basis points, due to this divergence in outlooks.

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EURUSD
The markets are pricing in a greater chance of another 25-bps lift-off at the next FOMC meeting in May. This is due to a rise in short-term inflation expectations, as shown by the University of Michigan’s preliminary report. The report also showed that the Consumer Sentiment Index inched up from 62.0 to 63.5 in April and one-year inflation expectations rose to 4.6% from 3.6% in March. These factors remain supportive of elevated US Treasury bond yields and continue to underpin the Greenback.

On Friday, Fed member Waller’s comments were very effective in changing odds toward more rates from The Fed at the next meetings against what the market was pricing for one last rate in May. As a result, the Dollar outperformed taking EURUSD for a correction toward last support making it new resistance.

Also, banking earnings from big banks on Friday eased concerns about banking fallout last month and gave more trust to the financial sector. A report from Fed last Friday showed deposits in different bank sizes are coming back to their normal conditions after the fear panic of the last month.

EURUSD recovered on Friday coming back toward the 1.0960 last resistance level to mark a new support. The long bullish trend still intact while the momentum seems solid. The pair made its correction and is forming a possible head and shoulders on the 1H chart with 1.1075 as the resistance level.

Support: 1.0960– 1.0930 – 1.0900 Resistance: 1.10100 – 1.1045 – 1.1075

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EURUSD
The possibility of a slower pace of interest rate hikes by the European Central Bank (ECB) may discourage traders from making aggressive bullish bets on the euro, as ECB policymakers have not ruled out a downward shift. Martins Kazaks, a member of the ECB, hinted on Monday that the bank could opt for a 25-basis-point hike at the May meeting. Meanwhile, the Federal Reserve is expected to continue raising interest rates, which could support the US dollar and limit the upside potential of the euro, at least for the time being. Traders are now awaiting the release of key sentiment figures for April in the Eurozone and Germany, while the US economic docket features housing market data, including Building Permits and Housing Starts, during the early North American session.
The correction in EURUSD has ended as predicted by technical analysis around the downward parallel of the long bullish channel and the 100MA. The next target is the resistance level of 1.0965, followed by 1.1000. However, if the pair breaks the 100MA, it could confirm a bearish stance and move back to the downside.

Support: 1.0920– 1.0885 – 1.0840
Resistance: 1.0965 – 1.1000 – 1.1045