Fundamental Overview
The USD yesterday has been supported in the European session as we got some risk-off flows across the board. The risk sentiment improved in the American session following the miss in the US Job Openings data where the data showed that the labour market continues to come into better balance while the quit and hire rates remained stable.
The EUR, on the other hand, has been gaining ground against the USD mainly because of the Dollar weakness amid the general risk-on sentiment regime. Moreover, the recent data from the Eurozone has been generally good with a pickup in the PMIs, high wage growth and strong labour market.
EURUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that the price action in the EURUSD pair has been mostly rangebound between the 1.08 support and the 1.09 resistance as the risk sentiment has been mixed. The price probed higher on Tuesday after the soft US ISM Manufacturing PMI, but eventually erased the gains and fell back below the 1.09 handle.
The buyers will want to see another breakout to gain more conviction and pile in more aggressively for a rally into the 1.10 handle. The sellers, on the other hand, will likely keep on leaning on the resistance with a defined risk above it to position for a drop back into the 1.08 support.
EURUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a minor trendline defining the current bullish momentum from the 1.08 support. This is where we can expect the buyers to pile in with a defined risk below the trendline to position for a break above the 1.09 resistance and target the 1.10 handle.
The sellers, on the other hand, will want to see the price falling below the trendline to gain even more conviction and increase the bearish bets into the 1.08 support.
EURUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a good support zone around the 1.0860 level where we can find the confluence of the trendline and the 61.8% Fibonacci retracement level. This is the level the sellers will want to see the price breaking to increase the bearish bets into the 1.08 support. The red lines define the average daily range for today.
Upcoming Catalysts
Today we get the US ADP and the US ISM Services PMI. Tomorrow, we have the ECB Policy Decision where the central bank is expected to deliver its first rate cut, and later in the day we get the US Jobless Claims figures. On Friday, we conclude the week with the US NFP report.
