FundamentalOverview
The USD continues to bebacked by good economic data as we have also seen recently from the US PMIs last Friday and the US Consumer Confidence report this week. Although suchdata keeps the interest rates expectations stable around two cuts by the end ofthe year, it should also support the risk sentiment amid a pickup in growth.This could be a headwind for the greenback.
The EUR, on the other hand,has been under pressure due to some US Dollar strength this week. It looks likethe price action is being influenced more by month-end, quarter-end and halfyear-end flows rather than something fundamental. We had also a key breakout inUSDJPY yesterday and flows there might have spilled over to other major pairs.
EURUSD TechnicalAnalysis – Daily Timeframe
On the daily chart, we cansee that EURUSD has been ranging just beneath the key 1.0727 level. As theprice stays below the level, it skews the bias more to the downside as thesellers continue to pile in for a drop into the 1.06 handle. The buyers will wantto see the price rallying back above the 1.0727 level to regain some controland start targeting new highs.
EURUSD TechnicalAnalysis – 4 hour Timeframe
On the 4 hour chart, we cansee that we have a strong support around the 1.0680 level where the price gotrejected from several times in the past days. We can also see that the pricehas been printing lower highs as the market kept testing the support. This is abearish price action and it also formed what looks like a descendingtriangle.
A breakout to the downsideshould see the bearish momentum increasing with the sellers piling in for adrop into the 1.06 handle. The buyers, on the other hand, will want to see abreakout to the upside to invalidate the bearish setup and position for a rallyinto the 1.08 handle.
EURUSD TechnicalAnalysis – 1 hour Timeframe
On the 1 hour chart, we cansee that we have an interesting resistance zone around the 1.07 handle as theprice reacted to it several times. A break above it should see the buyersextending the bounce from the 1.0670 support into the 1.0727 resistance. Thesellers, on the other hand, might lean on it to position for a break below thesupport with a better risk to reward setup. The red lines define the average daily range for today.
UpcomingCatalysts
Today we get the latest US Jobless Claims figures, while tomorrow we concludethe week with the US PCE report.
