Fundamental Overview

The USD got a boost yesterday from another set of hot data as the US Job Openings surprised to the upside and the prices paid index in the ISM Services PMI jumped to the highest level since 2023.

The market’s pricing didn’t change much but traders no longer fully price in the next rate cut before July. The US CPI report next week remains a key catalyst that will influence greatly the market’s pricing.

On the EUR side, the Eurozone CPI yesterday came in line with forecasts although the Core measure remains pretty sticky around 2.7%. As a reminder, the ECB cut the policy rate by 25 bps at the last decision bringing it to 3.00%.

The central bank removed the passage saying that “it will keep policy rates sufficiently restrictive for as long as necessary” implying that upside inflation risks have faded. The market sees a 93% probability of a rate cut at the upcoming meeting and a total of 100 bps of easing by year end.

EURUSD Technical Analysis – Daily Timeframe

EURUSD Technical Analysis
EURUSD Daily

On the daily chart, we can see that EURUSD erased the entire Christmas period drop, but it’s now back on its way toward the lows. The break below the 1.0332 level should see more sellers piling in for a move into the 1.0222 low. The buyers, on the other hand, will want to see the price rising back above the 1.0332 level to position for a pullback into the 1.0450 level again.

EURUSD Technical Analysis – 4 hour Timeframe

EURUSD Technical Analysis
EURUSD 4 hour

On the 4 hour chart, we can see that overall the price action has been pretty rangebound but the bearish momentum remained in place nonetheless. For now, the break below the 1.0332 level opened the door for another test of the 1.0222 low, so the buyers will look for the price to rally back above the 1.0332 level or some catalyst before piling in with more conviction.

EURUSD Technical Analysis – 1 hour Timeframe

EURUSD Technical Analysis
EURUSD 1 hour

On the 1 hour chart, there’s not much else we can add here as the sellers will keep on targeting the lows, while the buyers will look for a rally back above the 1.0332 level to target the 1.0450 resistance next. The red lines define the average daily range for today.

Upcoming Catalysts

Today, we have Fed’s Waller speaking, the US ADP and the FOMC Minutes. Tomorrow, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US NFP report.