EURUSD Technical Analysis

On the daily chart below, we can see that EURUSD has sold off pretty heavily from the 1.1033 resistance as US economic data in May beat expectations and made the market to reprice interest rates odds on the hawkish side. The bias is clearly bearish with the moving averages crossed to the downside and EURUSD printing lower lows and lower highs.

The support level Support Level A trading support or support level represents a given price that acts as a temporary barrier for an asset. In particular, this level ensures an asset’s price will not fall below it or will encounter difficulty in doing so.All assets can utilize supports, be it forex, equities, commodities, etc. A given asset's support level is created by buyers that enter the market whenever the asset falls to a lower price. Basic support levels can be calculated and charted by identifying the lowest lows for a A trading support or support level represents a given price that acts as a temporary barrier for an asset. In particular, this level ensures an asset’s price will not fall below it or will encounter difficulty in doing so.All assets can utilize supports, be it forex, equities, commodities, etc. A given asset's support level is created by buyers that enter the market whenever the asset falls to a lower price. Basic support levels can be calculated and charted by identifying the lowest lows for a Read this Term at 1.0700 is giving EURUSD bears a hard time as we need more strong data to price in something more hawkish now, and therefore a pullback may be due. If this is a major double top, we should see EURUSD falling to the 1.0533 support eventually as that would be the neckline of the pattern. The divergence between the two highs with the MACD also strengthens the case for more downside to come.

EURUSD Technical Analysis

On the 4 hour chart below, we can see that EURUSD has been trending downwards within a falling channel. Recently, the price started to diverge with the MACD coming into the 1.0700 support. This is a sign of weakening momentum often followed by pullbacks or reversals.

Yesterday, we got a big beat in US Job Openings which made the EURUSD fall even more, but soon after some Fed members hinted to a pause in June and the price quickly reversed and made new highs.

Today, the key data on the calendar is the US Jobless Claims and the ISM Manufacturing PMI report. However, it is unlikely that positive or negative data will significantly impact the market, considering the recent statements made by Fed members. Perhaps only a substantial deviation from expectations would have the potential to generate market movements.

On the 1 hour chart below, we can see that we have a downward trendline where the price got rejected off of the last time it pulled back. Moreover, we have also the 1.0711 support now turned resistance. This will be the level to watch for traders today as the sellers are likely to lean on it with a defined risk just above it to target another lower low. The buyers, on the other hand, will want to see the price breaking higher to pile in and extend the rally towards the 1.0760 level first and 1.0830 next.

Tomorrow, all eyes will be on the US NFP report. Should the data reveal positive outcomes coupled with higher-than-expected average hourly earnings, it could potentially increase market odds for a June rate hike and even price some for a July hike. This scenario might raise concerns within the market regarding a potential wage price spiral.

Conversely, if the data is favourable but falls short of expectations in terms of average hourly earnings, it should weaken the USD further as it shouldn’t change rates pricing much and the market will look forward to the CPI report next week.

In the event of unfavourable data, it should be perceived as negative news. However, given recent Fed officials’ comments, we should see EURUSD rallying as rate hikes from the Fed get priced out.