Slobodan Drvenica
Windsor Brokers
EUR/USD
The Euro keeps firm tone and hits new five-week high in early European trading on Wednesday. Fresh bull-leg extends into third consecutive day and cracked pivotal barriers at 1.0830 zone, consisting of 100DMA (1.0823) / Fibo 61.8% of 1.0981/1.0601 downtrend (1.0836) and thin daily cloud (spanned between 1.0820 and 1.0838).
Technical picture on daily chart is bullish (strong positive momentum / daily Tenkan/Kijun-sen bull cross) and continues to underpin the action, though increased headwinds should be anticipated, as bulls challenge very strong resistance zone and stochastic is overbought.
Bullish scenario requires firm break higher to signal continuation of larger uptrend towards targets at 1.0885 / 1.0916 (Apr 9 high / Fibo 76.4%).
Conversely, failure to register a clear break higher would ease the upside pressure, but near-term action to remain biased higher while holding above broken 200DMA / 50 retracement (1.0790) reverted to solid support.
Caution of break and close below 200DMA which would sideline bulls and risk deeper pullback.
The single currency was inflated by the data released on Tuesday (German annualized inflation ticked higher in April and German / Eurozone economic sentiment improved well above expectations).
Markets shift focus to key economic event today – release of US inflation report for April, which is expected to give fresh hints to the Fed and likely accelerate the price action upon release.
Inflation in the US is expected to ease in April (CPI y/y Apr 3.4% f/c vs Mar 3.5%; Core CPI y/y Apr 3.6% vs Mar 3.8%) with April figures in line or below expectations to fuel expectations for Fed rate cut in coming months and increase pressure on dollar, while higher than expected readings would sour the sentiment about policy easing and inflate the greenback.
Res: 1.0838; 1.0885; 1.0891; 1.0942.
Sup: 1.0812; 1.0790; 1.0774; 1.0746.
-638513663700787843.png)
Interested in EUR/USD technicals? Check out the key levels
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
Recommended Content
Editors’ Picks
EUR/USD stays below 1.1100, looks to post weekly losses
EUR/USD continues to trade in a narrow range below 1.1100 and remains on track to end the week in negative territory. Earlier in the day, monthly PCE inflation data from the US came in line with the market expectation, failing to trigger a reaction.
GBP/USD struggles to find a foothold, trades near 1.3150
GBP/USD stays on the back foot and trades in negative territory at around 1.3150 on Friday. The US Dollar holds its ground following the July PCE inflation data and doesn't allow the pair to stage a rebound heading into the weekend.
Gold retreats toward $2,500 ahead of the weekend
Gold stays under modest bearish pressure and declines toward $2,500 in the American session on Friday. The 10-year US Treasury bond yield edges higher toward 3.9% after US PCE inflation data, causing XAU/USD to stretch lower.
Week ahead – Investors brace for NFP amid Fed rate cut speculation
Here comes another NFP week, with investors eagerly awaiting the results as they try to discern the size and pace of the Fed’s forthcoming rate cuts. The weaker than expected July numbers triggered market turbulence, instilling fears about a potential recession in the US.
Easing Eurozone inflation to back an ECB rate cut in September Premium
Eurostat will publish the preliminary estimate of the August Eurozone Harmonized Index of Consumer Prices on Friday, and the anticipated outcome will back up the case for another European Central Bank interest rate cut when policymakers meet in September.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.