EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD is trading at $1.08156, showing limited movement within a cautious market environment.
- Key pivot at $1.08186 aligns with the 50 EMA, indicating crucial support.
- Recommended sell below $1.08177, targeting $1.07990 with a stop loss at $1.08307.
The Euro (EUR) has displayed limited movement against the US Dollar (USD) in the latest session, currently trading at $1.08156. This price action comes amid a cautious market environment, with traders eyeing the pivot point at $1.08186, which coincides with the 50-period Exponential Moving Average (EMA).
This level serves as a crucial juncture, indicating potential support or resistance depending on the directional movement.
Immediate resistance for the EUR/USD pair is noted at $1.08307, with additional resistance levels at $1.08332 and $1.08453.
These levels represent significant barriers for any upward momentum. On the support side, immediate support is found at $1.08181, with subsequent support levels at $1.07990 and $1.07993, providing a safety net against downward pressure.
The Relative Strength Index (RSI) is currently at 46.96, suggesting a slightly bearish sentiment as it lies below the neutral 50 mark. This indicates that the pair might face selling pressure in the near term. The 50 EMA at $1.08186 acts as a critical support level, and a breach below this could trigger further downside movement.
Traders should consider entering a sell position below $1.08177, targeting a take profit at $1.07990 with a stop loss set at $1.08307.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.08177
Take Profit – 1.07990
Stop Loss – 1.08307
Risk to Reward – 1: 1.4
Profit & Loss Per Standard Lot = +$187/ -$130
Profit & Loss Per Mini Lot = +$18/ -$13
EUR/USD Price Analysis – July 10, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair has shown strength in recent sessions, maintaining gains above the 1.0821 and reaching an intra-day high of 1.0826. However, the reason for its upward trend can be linked to the cautious stance of Federal Reserve Chair Jerome Powell, which has weighed on the US Dollar.
Simultaneously, positive political developments in Europe, including the defeat of Marine Le Pen’s far-right National Rally in the French elections, have bolstered the Euro. This outcome signals political stability, easing fears and supporting the Eurozone economically.
Impact of Powell's Cautious Remarks on US Dollar and Euro Strength
Jerome Powell's recent comments about the US labor market have had a significant impact on the US Dollar's performance against major currencies like the Euro. He pointed out a noticeable slowdown in current labor market conditions compared to previous years, indicating a deceleration in economic momentum.
This cautious assessment implies that the Federal Reserve might postpone or adopt a more restrained approach to interest rate cuts, diverging from earlier market anticipations of aggressive monetary easing.
Following Powell's remarks, the US Dollar Index (DXY), which gauges the Greenback's strength against major currencies, encountered selling pressure. Investors perceived Powell's comments as indicating that the Fed might hold off on rate cuts unless there's clear evidence of easing inflationary pressures.
Hence, Jerome Powell's cautious remarks on the US labor market led to selling pressure on the US Dollar, impacting the EUR/USD pair. The Euro strengthened as investors anticipated a more restrained approach to rate cuts by the Federal Reserve.
Political Stability in France Boosts Euro Against US Dollar
On the other side, the shared currency has also found support from domestic political developments within the Eurozone, particularly in France. The failure of Marine Le Pen’s far-right National Rally to secure an absolute majority in the French elections has eased concerns about a potential widening of the French financial crisis.
Despite leading in the initial round, the party’s inability to form a majority government has reduced fears of political instability that could have impacted the Euro's value negatively.
Investors welcomed the outcome as it signaled a probable coalition government between President Emmanuel Macron's centrist alliance and the left wing, led by Jean-Luc Mélenchon. This political configuration is viewed favorably by markets due to expectations of continued policy stability and fiscal responsibility.
EUR/USD - Technical Analysis
The Euro (EUR) has displayed limited movement against the US Dollar (USD) in the latest session, currently trading at $1.08156. This price action comes amid a cautious market environment, with traders eyeing the pivot point at $1.08186, which coincides with the 50-period Exponential Moving Average (EMA).
This level serves as a crucial juncture, indicating potential support or resistance depending on the directional movement.
Immediate resistance for the EUR/USD pair is noted at $1.08307, with additional resistance levels at $1.08332 and $1.08453.
These levels represent significant barriers for any upward momentum. On the support side, immediate support is found at $1.08181, with subsequent support levels at $1.07990 and $1.07993, providing a safety net against downward pressure.
The Relative Strength Index (RSI) is currently at 46.96, suggesting a slightly bearish sentiment as it lies below the neutral 50 mark. This indicates that the pair might face selling pressure in the near term.
The 50 EMA at $1.08186 acts as a critical support level, and a breach below this could trigger further downside movement.
Traders should consider entering a sell position below $1.08177, targeting a take profit at $1.07990 with a stop loss set at $1.08307.
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EUR/USD Price Analysis – July 08, 2024
Daily Price Outlook
During the European trading session, the EUR/USD pair extended its upward movement, reaching an intraday peak near 1.0843.
This rise was fueled by a weakening US dollar, which has been under pressure amid mounting speculation about potential rate cuts by the Federal Reserve.
Recent poor US economic indicators have heightened expectations that the Fed could start rate reductions as soon as September, with further cuts possibly following in December.
However, the upward momentum of the EUR/USD pair may face resistance due to uncertainties surrounding the outcome of France's election. Jean-Luc Mélenchon's unexpectedly strong showing for his left-wing party could potentially impact Eurozone policies and economic stability, tempering the euro's gains.
Impact of Weaker US Economic Data and Expected Fed Rate Cuts on EUR/USD Pair
On the US front, the broad-based US dollar has continued its decline as markets increasingly anticipate interest rate cuts by the Federal Reserve (Fed) in September, with potential further cuts in December.
This shift in expectations follows recent weaker US economic data. On the data front, the US Nonfarm Payrolls (NFP) report for June revealed a slowdown in hiring, with revised figures showing 110,000 fewer jobs added in April and May than initially reported.
Additionally, the Unemployment Rate unexpectedly rose to 4.1%, up from the anticipated and previous 4.0%.
Therefore, the weaker US economic data and expected Fed rate cuts have weakened the US dollar, impacting the EUR/USD pair positively as the euro strengthens against the dollar amid decreased rate hike expectations.
Impact of French Political Uncertainty and ECB Policy on EUR/USD Pair
Despite uncertainties in French politics, the euro has been performing well. Exit polls indicate that Jean-Luc Mélenchon's left-wing New Popular Front might create a coalition government, potentially ahead of Macron's centrist group and Le Pen's National Rally.
Since no single party has a clear majority, there are ongoing discussions about which individuals will fill government positions and who will become the next Prime Minister. Mélenchon has even suggested that Macron should resign to allow the left-wing coalition to take control of economic policies.
Meanwhile, concerns about high inflation have reduced hopes that the European Central Bank will lower interest rates soon. In June, inflation in the Eurozone stayed high at 2.9% compared to last year, mainly due to higher costs for services.
ECB President Lagarde emphasized the need to stay cautious, especially with ongoing pressures that could lower inflation, at the Sintra Forum.
Therefore, the uncertainty in French politics and concerns over inflation have kept the EUR/USD pair stable, with potential coalition outcomes influencing market sentiment while inflation worries affect ECB rate cut expectations.
EUR/USD - Technical Analysis
The EUR/USD pair is currently trading at $1.08365, reflecting a modest increase of 0.15%. The 4-hour chart reveals critical technical levels and indicators that traders should monitor. The pivot point is set at $1.0816, marking a crucial threshold for potential bullish or bearish movements.
Immediate resistance levels are identified at $1.0839, $1.0854, and $1.0872. A break above these levels could signal further upward momentum for the pair. Conversely, support levels are found at $1.0795, $1.0779, and $1.0763. A drop below these support points could trigger a significant selling trend.
The Relative Strength Index (RSI) is currently at 63, suggesting that the EUR/USD pair is in bullish territory but not yet overbought. Typically, an RSI level below 70 indicates room for further gains before potential overvaluation concerns arise.
The 50-day Exponential Moving Average (EMA) stands at $1.0790, reinforcing the bullish trend as long as the price remains above this average. The EMA acts as dynamic support, and maintaining a price above this level supports the ongoing bullish sentiment.
Given the current market setup, an effective strategy would be to enter a buy position above $1.08294. Setting a take-profit target at $1.08540 aligns with immediate resistance levels, providing a favorable risk-reward ratio while capturing potential gains. A stop-loss at $1.08138, just below the pivot point, helps limit downside risk from unexpected market movements.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD remains in bullish territory with RSI at 63, indicating room for further gains.
- Key resistance levels at $1.0839, $1.0854, and $1.0872 to watch for potential breakout.
- Support levels at $1.0795, $1.0779, and $1.0763 critical for downside risk management.
The EUR/USD pair is currently trading at $1.08365, reflecting a modest increase of 0.15%. The 4-hour chart reveals critical technical levels and indicators that traders should monitor. The pivot point is set at $1.0816, marking a crucial threshold for potential bullish or bearish movements.
Immediate resistance levels are identified at $1.0839, $1.0854, and $1.0872. A break above these levels could signal further upward momentum for the pair. Conversely, support levels are found at $1.0795, $1.0779, and $1.0763. A drop below these support points could trigger a significant selling trend.
The Relative Strength Index (RSI) is currently at 63, suggesting that the EUR/USD pair is in bullish territory but not yet overbought. Typically, an RSI level below 70 indicates room for further gains before potential overvaluation concerns arise.
The 50-day Exponential Moving Average (EMA) stands at $1.0790, reinforcing the bullish trend as long as the price remains above this average. The EMA acts as dynamic support, and maintaining a price above this level supports the ongoing bullish sentiment.
Given the current market setup, an effective strategy would be to enter a buy position above $1.08294. Setting a take-profit target at $1.08540 aligns with immediate resistance levels, providing a favorable risk-reward ratio while capturing potential gains. A stop-loss at $1.08138, just below the pivot point, helps limit downside risk from unexpected market movements.
EUR/USD - Trade Ideas
Entry Price – Buy Above 1.08294
Take Profit – 1.08540
Stop Loss – 1.08138
Risk to Reward – 1: 1.5
Profit & Loss Per Standard Lot = +$246/ -$156
Profit & Loss Per Mini Lot = +$24/ -$15
EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD trading at $1.08282, up 0.08%; pivot point at $1.0816 is crucial.
- RSI at 73 indicates potential overbought conditions, signaling possible correction.
- Immediate resistance at $1.0839; support levels at $1.0795 and $1.0779 offer buying opportunities.
The EUR/USD pair is trading at $1.08282, marking a modest increase of 0.08% in early trading. On the 4-hour chart, several key technical levels could shape the pair's short-term direction. The pivot point at $1.0816 serves as a crucial marker for potential bullish or bearish movements.
Immediate resistance is seen at $1.0839, followed by $1.0854 and $1.0872. A break above these levels could signal further upside momentum, potentially pushing the pair towards higher resistance zones.
Conversely, immediate support is located at $1.0795, with further supports at $1.0779 and $1.0763, which could provide buying opportunities if the price pulls back.
The Relative Strength Index (RSI) is currently at 73, indicating that the EUR/USD is approaching overbought conditions.
Typically, an RSI at this level suggests that the asset may be overvalued, which could precede a price correction. Therefore, traders should be cautious and watch for any signs of a bearish reversal.
The 50-day Exponential Moving Average (EMA) is positioned at $1.0769, reinforcing the bullish trend as long as the price remains above this average. The EMA acts as dynamic support, and maintaining a price above this level supports the ongoing bullish sentiment.
Given the current market setup, an effective strategy would be to enter a buy position above $1.08166. Setting a take-profit target at $1.08443 aligns with immediate resistance levels, ensuring a favorable risk-reward ratio while capturing potential gains.
A stop-loss at $1.08013, just below the pivot point, helps limit downside risk from unexpected market movements.
EUR/USD - Trade Ideas
Entry Price – Buy Above 1.08166
Take Profit – 1.08443
Stop Loss – 1.08013
Risk to Reward – 1: 1.8
Profit & Loss Per Standard Lot = +$277/ -$153
Profit & Loss Per Mini Lot = +$27/ -$15
EUR/USD Price Analysis – July 05, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair continued its ascent, reaching a three-week high near the 1.0830 level. This upward movement was largely driven by weakness in the US dollar, which has been losing ground amidst growing speculation of Federal Reserve rate cuts.
Recent lackluster US economic data has fueled expectations that the Fed might slash rates as early as September, with further cuts possibly in December. As a result, the USD has declined for the fourth consecutive day, hitting a three-week low and boosting gold prices in the process.
Conversely, the Euro has seen increased demand amid political developments in France. Speculation that Marine Le Pen's far-right National Rally might not secure a majority in the legislative elections has bolstered the Euro's appeal.
This scenario unfolded as a coalition supporting President Emmanuel Macron strategically withdrew candidates, potentially preventing a far-right sweep.
Furthermore, expectations for imminent rate cuts by the European Central Bank (ECB) on July 18 have tempered, as recent data suggests that disinflation in the Eurozone may be stabilizing. This factor has also supported the EUR/USD pair's upward trajectory.
Impact of US Dollar Decline, Interest Rate Expectations, and Nonfarm Payrolls Report on Gold Prices and Federal Reserve Policy
Impact of Weakening US Dollar and Key US Economic Data on the EUR/USD Pair
On the US front, the broad-based US dollar has continued its decline as markets increasingly anticipate interest rate cuts by the Federal Reserve (Fed) in September, with potential further cuts in December.
This shift in expectations follows recent weaker US economic data, prompting the US Dollar (USD) to extend its decline for the fourth consecutive day, reaching its lowest level in over three weeks. This trend has significantly bolstered gold prices, underscoring their appeal amid the weakening dollar environment.
On the economic front, the highly anticipated Nonfarm Payrolls report is scheduled for release later today during the North American session. Analysts project that the report will indicate the US economy added 190,000 jobs in June, marking a decrease from the previous month's 272,000.
The unemployment rate is expected to hold steady at 4%, signaling stability in the labor market. However, there might be a slight slowdown in Average Hourly Earnings growth, with anticipated annual growth of 3.9%, down from May's 4.1% increase. These numbers are closely monitored as they offer critical insig
Therefore, the weakening US dollar amid anticipated Fed rate cuts has bolstered the EUR/USD pair, pushing it to a three-week high. Key US jobs data, including Nonfarm Payrolls and wage growth, will further influence its direction today.
Impact of French Political Developments and Eurozone Inflation Trends on the EUR/USD Pair
On the EUR front, the Euro is gaining support amidst expectations that Marine Le Pen's far-right National Rally may not secure an outright majority in France's legislative elections, thanks to tactical candidate withdrawals by President Macron's alliance and the left.
Meanwhile, the speculation about the European Central Bank (ECB) cutting rates further on July 18 has waned due to signs that inflation in the Eurozone, excluding volatile items, held steady with a 2.9% year-on-year increase in June, suggesting a pause in disinflationary trends.
These developments are likely bolstering the Euro against the US Dollar, as reduced political uncertainty in France and stabilizing inflation expectations lessen the urgency for ECB rate cuts, supporting the EUR/USD pair.
EUR/USD - Technical Analysis
The EUR/USD pair is trading at $1.08282, marking a modest increase of 0.08% in early trading. On the 4-hour chart, several key technical levels could shape the pair's short-term direction. The pivot point at $1.0816 serves as a crucial marker for potential bullish or bearish movements.
Immediate resistance is seen at $1.0839, followed by $1.0854 and $1.0872. A break above these levels could signal further upside momentum, potentially pushing the pair towards higher resistance zones. Conversely, immediate support is located at $1.0795, with further supports at $1.0779 and $1.0763, which could provide buying opportunities if the price pulls back.
The Relative Strength Index (RSI) is currently at 73, indicating that the EUR/USD is approaching overbought conditions. Typically, an RSI at this level suggests that the asset may be overvalued, which could precede a price correction. Therefore, traders should be cautious and watch for any signs of a bearish reversal.
The 50-day Exponential Moving Average (EMA) is positioned at $1.0769, reinforcing the bullish trend as long as the price remains above this average. The EMA acts as dynamic support, and maintaining a price above this level supports the ongoing bullish sentiment.
Given the current market setup, an effective strategy would be to enter a buy position above $1.08166. Setting a take-profit target at $1.08443 aligns with immediate resistance levels, ensuring a favorable risk-reward ratio while capturing potential gains. A stop-loss at $1.08013, just below the pivot point, helps limit downside risk from unexpected market movements.
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EUR/USD Price Analysis – July 03, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair continued its mild bullish trend and remained well bid around the 1.0761 level, hitting an intraday high of 1.0764.
The mild upward trend was attributed to renewed selling pressure in the US dollar, which lost some of its gains on the back of mounting expectations of upcoming rate cuts by the Federal Reserve in both September and December. These expectations were bolstered by Federal Reserve Chair Jerome Powell's recent dovish remarks.
Impact of Eurozone Inflation and ECB Policy Uncertainty on EUR/USD Pair
On the EUR front, Eurozone headline inflation eased to 2.5% in June from 2.6% in May, while core inflation held steady at 2.9%, slightly above expectations of 2.8%. These figures indicate ongoing uncertainty over future price trends, complicating the European Central Bank's (ECB) interest rate stance.
ECB President Christine Lagarde noted positive inflation trends at the ECB Forum on Central Banking, suggesting progress in disinflation efforts.
Meanwhile, ECB policymaker Gabriel Makhlouf supports one potential rate cut this year but disagrees with market expectations for two cuts, leaving room for further monetary policy uncertainty. In political news, EU's second-largest nation saw strategic candidate withdrawals ahead of parliamentary elections aimed at countering far-right gains.
Therefore, the mixed inflation data and ECB's uncertain rate outlook could lead to volatility for the EUR/USD pair, influenced by market perceptions of Eurozone economic stability and ECB policy direction amid political developments in the EU.
Impact of Weakening US Dollar and Fed Expectations on EUR/USD Pair
On the US front, the weakening US dollar, despite strong labor market data exceeding forecasts, has heightened expectations for a Federal Reserve rate cut in September. This economic resilience suggests a potential easing of monetary policy.
Fed Chair Jerome Powell, while noting progress in inflation, remains cautious, emphasizing the need for sustained inflation trends toward the 2% target before considering rate adjustments. Additionally, JOLT job openings unexpectedly rose, indicating a robust labor market that could boost consumer spending and inflation concerns.
These dynamics create a complex backdrop for the EUR/USD pair, potentially supporting its strength against a softer dollar.
Therefore, the weakening US dollar amid anticipated Fed rate cuts could bolster the EUR/USD pair, supported by market expectations of softer monetary policy in the US and potential economic resilience in the Eurozone.
EUR/USD - Technical Analysis
The EUR/USD pair is showing signs of modest strength, trading at $1.07576, a 0.11% increase on the day. This movement is underpinned by a bullish sentiment as the pair inches closer to its pivot point at $1.0793.
The immediate resistance level stands at $1.0794, followed by further resistance at $1.0817 and $1.0845. On the downside, immediate support is found at $1.0726, with subsequent supports at $1.0693 and $1.0668. These levels are crucial as they indicate potential areas of consolidation or reversal.
Technical indicators paint a supportive picture for the euro. The Relative Strength Index (RSI) is currently at 60, suggesting the pair has room to advance further before approaching overbought conditions.
The 50-day Exponential Moving Average (50 EMA) at $1.07160 serves as a significant support level, reinforcing the bullish bias as long as the price remains above this moving average. This alignment of technical factors suggests a favorable environment for further gains, provided key resistance levels are breached.
The EUR/USD's recent price action reflects a broader sentiment of cautious optimism among investors.
As economic data and central bank communications continue to shape market expectations, the pair's ability to sustain above its pivot point and 50 EMA will be closely watched. The RSI near 60 implies a balanced outlook, with the potential for further upside if resistance levels are surpassed
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD is trading at $1.07576, up 0.11% on the day, indicating modest strength.
- Key resistance levels are $1.0794, $1.0817, and $1.0845, with immediate support at $1.0726.
- RSI is at 60, suggesting room for further gains, while the 50 EMA at $1.07160 acts as a significant support level.
The EUR/USD pair is showing signs of modest strength, trading at $1.07576, a 0.11% increase on the day. This movement is underpinned by a bullish sentiment as the pair inches closer to its pivot point at $1.0793.
The immediate resistance level stands at $1.0794, followed by further resistance at $1.0817 and $1.0845. On the downside, immediate support is found at $1.0726, with subsequent supports at $1.0693 and $1.0668. These levels are crucial as they indicate potential areas of consolidation or reversal.
Technical indicators paint a supportive picture for the euro. The Relative Strength Index (RSI) is currently at 60, suggesting the pair has room to advance further before approaching overbought conditions.
The 50-day Exponential Moving Average (50 EMA) at $1.07160 serves as a significant support level, reinforcing the bullish bias as long as the price remains above this moving average. This alignment of technical factors suggests a favorable environment for further gains, provided key resistance levels are breached.
The EUR/USD's recent price action reflects a broader sentiment of cautious optimism among investors.
As economic data and central bank communications continue to shape market expectations, the pair's ability to sustain above its pivot point and 50 EMA will be closely watched. The RSI near 60 implies a balanced outlook, with the potential for further upside if resistance levels are surpassed
EUR/USD - Trade Ideas
Entry Price – Buy Above 1.07529
Take Profit – 1.07927
Stop Loss – 1.07266
Risk to Reward – 1: 1.5
Profit & Loss Per Standard Lot = +$398/ -$263
Profit & Loss Per Mini Lot = +$39/ -$26
EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD trades at $1.07662, RSI at 68, indicating bullish momentum.
- Immediate resistance at $1.0794, support at $1.0726.
- Buy above $1.07529, target $1.07927, with a stop loss at $1.07266.
EUR/USD is trading at $1.07662, reflecting a robust increase of 0.42% on the 4-hour chart, indicating positive momentum. The pivot point for today stands at $1.0753, serving as a crucial benchmark for market direction.
Immediate resistance is observed at $1.0794, with subsequent resistance levels at $1.0817 and $1.0845, marking potential targets for continued bullish activity. On the downside, immediate support is positioned at $1.0726, followed by deeper support levels at $1.0693 and $1.0668, providing potential stops for a bearish reversal.
The Relative Strength Index (RSI) is currently at 68, suggesting that the currency pair is nearing overbought conditions, yet still supports a bullish sentiment. The 50-day Exponential Moving Average (EMA) at $1.0714 further supports the current price action, indicating that the short-term trend remains upward.
Traders should consider entering long positions above the pivot point of $1.07529, targeting a take profit level at $1.07927. A stop loss at $1.07266 is advisable to manage downside risks effectively.
The alignment of technical indicators, including the elevated RSI and the supportive 50-day EMA, points to a bullish outlook for EUR/USD, provided it stays above the pivot point.
EUR/USD - Trade Ideas
Entry Price – Buy Above 1.07529
Take Profit – 1.07927
Stop Loss – 1.07266
Risk to Reward – 1: 1.5
Profit & Loss Per Standard Lot = +$398/ -$263
Profit & Loss Per Mini Lot = +$39/ -$26
EUR/USD Price Analysis – July 01, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair extended its winning streak and gained further traction around the 1.0751 level, hitting an intraday high of 1.0776.
The upward rally can be attributed to a combination of factors, including a weaker US dollar, which lost traction following the release of softer United States (US) core Personal Consumption Expenditures Price Index (PCE) data for May.
This fueled expectations of early rate cuts by the Federal Reserve (Fed) and put pressure on the US dollar, contributing to gains in the EUR/USD pair.
Additionally, the stronger-than-expected performance of Marine Le Pen's RN in France's parliamentary elections was seen as another key factor that added upward pressure on the EUR/USD pair.
EUR Strengthens Amid Reduced Political Uncertainty in France
On the EUR front, the major currency pair is strengthening following the first round of France's parliamentary elections, where Marine Le Pen's far-right National Rally (RN) performed well, albeit with a narrower lead than expected.
The uncertainty surrounding RN's chances of securing an outright majority has boosted the euro's attractiveness.
According to Carol Kong from the Commonwealth Bank of Australia, a less dominant showing by the far-right party could reduce fears of unsustainable fiscal measures, thereby boosting euro sentiment.
Meanwhile, investors are watching for signals from the European Central Bank (ECB) regarding further interest rate cuts. The ECB began easing rates in early June after maintaining a tight policy to counter pandemic-driven inflation pressures.
Looking ahead, investors eyes on the preliminary German Harmonized Index of Consumer Prices (HICP) data for June, releasing at 12:00 GMT.
Meanwhile, the economists anticipate a slower annual rise in HICP at 2.6% in the Eurozone's largest economy, down from 2.8% previously. The monthly Consumer Price Index (CPI) is expected to accelerate to 0.2% from May's 0.1%.
Therefore, the EUR/USD pair is likely strengthening due to reduced uncertainty from France's elections, where Marine Le Pen's RN performed strongly but with a narrower lead. This has boosted Euro sentiment amid expectations of potential ECB interest rate cuts.
Impact on EUR/USD Pair Amid US Dollar Correction and Rate Cut Expectations
On the US front, the broad-based US dollar edged lower following the expected decline in the US core Personal Consumption Expenditures Price Index (PCE) for May.
This reinforced expectations of early Federal Reserve (Fed) rate cuts and put pressure on USD. It should be noted that the core PCE inflation, a key Fed metric, eased to 2.6% from 2.8% previously.
Meanwhile, CME FedWatch indicates a 63.4% probability of rate cuts in September, with expectations now leaning towards two cuts this year, contrary to the Fed's initial projection of one.
However, the US Dollar Index (DXY) dipped near 105.40 as markets anticipate volatility from upcoming economic releases, starting with the ISM Manufacturing Purchasing Managers’ Index (PMI) for June, expected to show marginal improvement but continued contraction in factory activity below the 50.0 level.
Therefore, the EUR/USD pair is likely to strengthen as the US Dollar edged lower on expectations of early Fed rate cuts following softer core PCE inflation data, pushing the US Dollar Index (DXY) down to around 105.40 amid anticipated market volatility from upcoming economic releases.
EUR/USD - Technical Analysis
EUR/USD is trading at $1.07662, reflecting a robust increase of 0.42% on the 4-hour chart, indicating positive momentum. The pivot point for today stands at $1.0753, serving as a crucial benchmark for market direction.
Immediate resistance is observed at $1.0794, with subsequent resistance levels at $1.0817 and $1.0845, marking potential targets for continued bullish activity. On the downside, immediate support is positioned at $1.0726, followed by deeper support levels at $1.0693 and $1.0668, providing potential stops for a bearish reversal.
The Relative Strength Index (RSI) is currently at 68, suggesting that the currency pair is nearing overbought conditions, yet still supports a bullish sentiment. The 50-day Exponential Moving Average (EMA) at $1.0714 further supports the current price action, indicating that the short-term trend remains upward.
Traders should consider entering long positions above the pivot point of $1.07529, targeting a take profit level at $1.07927. A stop loss at $1.07266 is advisable to manage downside risks effectively.
The alignment of technical indicators, including the elevated RSI and the supportive 50-day EMA, points to a bullish outlook for EUR/USD, provided it stays above the pivot point.
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