FundamentalOverview
The USD weakened across theboard since last Friday following the soft US NFP report. The data showed some more labourmarket cooling with an increase in the unemployment rate and a decrease in wagegrowth. We basically have an economy that is slowing but still growing. We willsee if the market will be able to keep the positive sentiment on soft landinghopes or start to worry about a recession.
The EUR, on the other hand,gained last week against the US Dollar mainly because of the risk-on sentimentas the US data continued to support at least two rate cuts from the Fed butdidn’t send recessionary signals. On the political front, the Frenchelections ended up in a loss for Le Pen’s National Rally party but also ahung parliament.
EURUSD TechnicalAnalysis – Daily Timeframe
On the daily chart, we cansee that EURUSD eventually managed to extend the rally above the 1.08 handlebut consolidated just above it since the US NFP report.
The buyers will likely stepin around these levels to keep pushing towards the 1.09 resistancenext. The sellers, on the other hand, will want to see the price falling back belowthe 1.08 level to regain some near-term control.
EURUSD TechnicalAnalysis – 4 hour Timeframe
On the 4 hour chart, we cansee more clearly the recent break and consolidation just above the 1.08 handle.We now have a nice support zone around the 1.0780 level where we can find the confluenceof the previous swing high, the trendlineand the 50% Fibonacciretracement level.
If we get a pullback intothat support, we can expect the buyers to step in with a defined risk below thetrendline to position for a continuation of the rally into the 1.09 resistance.The sellers, on the other hand, will want to see the price breaking below thetrendline to increase the bearish bets into the 1.0727 support.
EURUSD TechnicalAnalysis – 1 hour Timeframe
On the 1 hour chart, we cansee that the buyers will have the option to step in around the 1.0812 level orthe trendline around the 1.0780 level. The sellers, on the other hand, willlikely pile in on every break lower. The red lines define the average daily range for today.
UpcomingCatalysts
Today we have Fed Chair Powell testifying to Congress and the markets will befocused on any view or hint about monetary policy after the recent NFP report.Thursday will be the most important day of the week as we get the US CPI andthe US Jobless Claims figures. Finally, on Friday, we conclude the week withthe US PPI and the University of Michigan Consumer Sentiment survey.
