Fundamental
Overview
The US Dollar yesterday
weakened across the board despite a higher than expected US
Core PPI and Fed
Chair Powell acknowledging the need to proceed more carefully with rate
cuts from here on.
This might be a signal that
the market could be fine with just two rate cuts priced in for 2025 and will
need some stronger reasons to price out those as well. This could trigger a bigger
pullback in the US Dollar after the incredible run since the beginning of
October.
On the EUR side, not much
has changed with the market continuing to price in a 31% chance of a 50 bps cut
in December and a total of 148 bps of easing by the end of 2025. This could
turn out to be too much if the data picks up.
EURUSD Technical
Analysis – Daily Timeframe
EURUSD Daily
On the daily chart, we can
see that EURUSD bounced from the key support zone around the 1.05 handle. That’s where the buyers
stepped in with a defined risk below the level to position for a rally back into
the 1.08 handle. The sellers, on the other hand, will want to see the price
breaking lower to increase the bearish bets into new lows.
EURUSD Technical
Analysis – 4 hour Timeframe
EURUSD 4 hour
On the 4 hour chart, we can
see that we have a downward trendline defining the current bearish
momentum. We can expect the sellers to lean on it to position for the break
below the 1.05 handle, while the buyers will look for a break higher to
increase the bullish bets into the 1.08 handle.
EURUSD Technical
Analysis – 1 hour Timeframe
EURUSD 1 hour
On the 1 hour chart, we can
see that we have a minor resistance zone around the 1.0590 level where we have
the trendline for confluence.
This is where the sellers are likely to step in with a defined risk above the resistance
to position for the break below the 1.05 handle.
The buyers, on the other
hand, will look for a break higher to increase the bullish bets into the 1.08
handle. The red lines define the average daily range for today.
Upcoming
Catalysts
Today, we conclude the week with the US Retail Sales data.