On the daily chart below for EURUSD , we can see that the buyers tried to sustain a break above the 1.1033 high multiple times but without much success. The red long period moving average was acting as support for the pullbacks, but now the moving averages have crossed to the downside which is a bad omen for the buyers and a good sign for the sellers.

The price has been diverging with the MACD for a long time, which may be a sign that the whole uptrend was based on weak bases. This may turn into a big double top pattern with the neckline at 1.0533, which should also be the first target for the sellers in case we start a downtrend.

EURUSD technical analysis

On the 4 hour chart below, we can see that the market has been trading within a rising channel rising into the 1.1033 high. Once the price reached the high it started to range as a strong battle between buyers and sellers ensued. We can also see that the channel was diverging with the MACD and generally once the price breaks out, the target is the base of the channel, which in this case is the 1.0750 level. Today, the price is also breaking out of the range and we should start to see lower lows and lower highs going forward.

On the 1 hour chart below, we can see that yesterday the upward CPI spike was faded soon after. The data was in line with expectations almost across the board with just a little miss on the headline Y/Y figure. What is becoming evident is that the disinflationary trend is slowing while the labour market remains tight.

If this continues or inflation gets stuck at a higher level, the Fed may be forced to do more and a hard landing in that case will be certain. Today, we have the US Jobless Claims data and tomorrow the University of Michigan Consumer Sentiment survey. Strong data should be good for the USD.

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