Fundamental Overview
Yesterday, we got two strong US data releases as the Jobless Claims and Retail Sales figures came out much better than expected. The initial reaction was US Dollar bullish, but after a while the market started to fade the move.
The reason is that the risk-on sentiment is generally negative for the greenback as the market focuses on positive global growth. Of course, the reasons to sell the USD are not that strong and that’s why in the big picture the major currency pairs have been mostly trading in a range for a year.
But in the short term, the changes in sentiment are influencing the price action and the US Dollar performance.
EURUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that EURUSD is struggling to break above the 1.10 handle as the price got rejected strongly two times already. Nonetheless, the price continues to print higher lows which is a bullish signal. The buyers will want to see the price rising back above the 1.10 handle to pile in for a rally into the 1.1136 level, while the sellers will look for key breaks on lower timeframes to position for more downside.
EURUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have an upward trendline where the price bounced off of yesterday following the spike lower after the strong US data. The buyers will likely keep on leaning on this trendline to position for new highs, while the sellers will want to see a break below it to pile in for a drop into the 1.0882 level next.
EURUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a notable resistance zone around the 1.0985 level where we can also find a minor counter-trendline for confluence. The buyers will want to see the price breaking higher to increase the bullish bets into new highs, while the sellers should wait for a break below the trendline before considering shorts. The red lines define the average daily range for today.
Upcoming Catalysts
Today we conclude the week with the University of Michigan Consumer Sentiment survey.
