Fundamental
Overview
The USD continues to remain
under pressure against most major currencies despite higher Core PCE estimates
following the US CPI and PPI reports, and a better-than-expected Retail Sales data on Monday.
The market pricing for the
Fed went from expecting more than 80 bps of easing by year-end at the peak of
the risk-off sentiment to roughly 59 bps as of now. That didn’t provide a
pullback in the US Dollar selloff though. The focus now switched to the FOMC
decision due later today where the Fed is expected to keep rates steady.
On the EUR side, the market
recently scaled back the rate cuts expectations following the news of more
defence spending. The European yields spiked and boosted the Euro. Moreover,
the ECB speakers have been coming a bit less dovish recently as they’ve been
cautioning against cutting rates too fast.
EURUSD Technical
Analysis – Daily Timeframe
EURUSD Daily
On the daily chart, we can
see that the EURUSD is consolidating at the key 1.0938 level. This is where we
can expect the sellers to step in with a defined risk above the level to
position for a pullback into the 1.0600 handle. The buyers, on the other hand,
will want to see the price breaking higher to increase the bullish bets into the
1.12 handle next.
EURUSD Technical
Analysis – 4 hour Timeframe
EURUSD 4 hour
On the 4 hour chart, we can
see that the pair has been losing momentum recently. If we were to get a
pullback, the support should be around the 1.0767 level where the
momentum started to wane. That’s where we can expect the buyers to step in with
a defined risk below the level to position for a rally into the 1.12 handle.
The sellers, on the other hand, will want to see the price breaking lower to
increase the bearish bets into the 1.06 handle next.
EURUSD Technical
Analysis – 1 hour Timeframe
EURUSD 1 hour
On the 1 hour chart, there’s
not much else we can add here as the buyers will look for a break above the
1.0938 level, while the sellers will continue to pile in around these levels
for a pullback into the 1.0767 level next. The red lines define the average daily range for today although they are likely
to be unreliable today given the FOMC event.
Upcoming
Catalysts
Today we have the FOMC Policy Decision.
Tomorrow, we get the latest US Jobless Claims figures.