Fundamental
Overview
The US Dollar came under
pressure last week following the US PPI report as the details that feed into the Core
PCE index, which is what the Fed focuses on, were all very soft. That helped to
bring the early estimates down to more benign levels. In fact, the Core PCE Y/Y
is now projected to fall to 2.6% vs. 2.8% in the prior month. That’s good news
for the Fed.
The bearish momentum
increased eventually as the Trump’s tariffs saga came to an end. In fact, the
US President announced his reciprocal tariffs that could go into effect in April
but the overall tone of it wasn’t aggressive and sounded a lot like the start
of a negotiating process to bring tariffs to a fair level for everyone.
On the EUR side, it’s been
all about the US Dollar softness and with the markets now less concerned about
tariffs, the major currencies got the green light to appreciate against the
greenback.
Today, we have the US-Russia
talks in Saudi Arabia and positive headlines will likely be good for the risk sentiment
and weigh further on the dollar. A peace deal will also be positive for the Eurozone
economy all else being equal.
EURUSD Technical
Analysis – Daily Timeframe
EURUSD Daily
On the daily chart, we can
see that the EURUSD is now trading between the 1.0532 resistance and the 1.0452 support. The buyers will
likely step in around the support to position for a rally into the 1.06 handle.
The sellers, on the other hand, will look for a break below the support to
increase the bearish bets into the 1.0380 level next.
EURUSD Technical
Analysis – 4 hour Timeframe
EURUSD 4 hour
On the 4 hour chart, we can
see the price testing the support as the market is likely awaiting the headlines
on the US-Russia talks in Saudi Arabia. If the price were to break lower, we
can expect the sellers to pile in for a deeper pullback into the trendline.
The buyers, on the other hand, will likely lean on the trendline to position
for a rally into the 1.06 handle with a better risk to reward setup.
EURUSD Technical
Analysis – 1 hour Timeframe
EURUSD 1 hour
On the 1 hour chart, we can
see that we have a counter-trendline defining the current pullback. The sellers
will continue to lean on it to push into new lows, while the buyers will look
for a break higher to increase the bullish bets into new highs. The red lines
define the average daily range for today.
Upcoming
Catalysts
Today we have the US-Russia talks in Saudi
Arabia. On Thursday, we get the latest US Jobless Claims figures, while on
Friday we conclude the week with the Eurozone and the US Flash PMIs.