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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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD trades at $1.06972, down 0.16%, with RSI at 48.
- Immediate resistance at $1.0713 and support at $1.0686.
- Entry: Sell below $1.0700; Take Profit: $1.06725; Stop Loss: $1.07191.
The EUR/USD pair is trading at $1.06972, down 0.16% on the day. The 4-hour chart highlights critical price levels, with the pivot point set at $1.0700. Immediate resistance is located at $1.0713, followed by $1.0727 and $1.0745.
On the downside, immediate support is found at $1.0686, with further support levels at $1.0671 and $1.0655.
The Relative Strength Index (RSI) is currently at 48, indicating neutral momentum and suggesting that the market is neither overbought nor oversold. The 50-day Exponential Moving Average (EMA) is at $1.0707, acting as a key resistance level. The EUR/USD needs to break above this level to indicate further bullish momentum.
Traders should consider selling positions below the pivot point of $1.0700, with a target of the first support level at $1.06725. A break below this level could pave the way for further declines towards $1.0671 and $1.0655.
Conversely, if the pair moves above the immediate resistance at $1.0713, it could target the next resistance levels at $1.0727 and $1.0745.
In summary, while EUR/USD is experiencing a slight downturn, the overall outlook remains bearish below the pivot point of $1.0700.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.07000
Take Profit – 1.06725
Stop Loss – 1.07191
Risk to Reward – 1: 1.5
Profit & Loss Per Standard Lot = +$350/ -$191
Profit & Loss Per Mini Lot = +$27/ -$19
EUR/USD Price Analysis – June 28, 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 1.0707 level, hitting an intraday high of 1.0711. The mild upward trend was attributed to renewed selling pressure in the US dollar, which lost some of its gains on the back of softer macroeconomic data published on Thursday.
This has increased expectations for the Federal Reserve to begin cutting rates soon. On the flip side, the downbeat European data released on Thursday tends to undermine the shared currency and could cap further gains in the EUR/USD pair.
Impact of Eurozone Economic Data on the EUR/USD Pair
On the EUR front, recent data showed a slight softening as the pan-EU Economic Sentiment Indicator fell to 95.9 from 96.0, missing expectations of a rise to 96.2. Looking ahead, Friday’s German unemployment figures are anticipated to reveal a decrease in new jobless benefit seekers to 15,000 in June, down from 25,000 previously.
The seasonally-adjusted unemployment rate for June is expected to remain unchanged at 5.9%. These indicators suggest a cautious economic outlook in the Eurozone, influenced by ongoing challenges and cautious labor market conditions in Germany specifically.
Therefore, the softer economic data from the Eurozone, particularly in Germany, could weigh on the EUR/USD pair, reflecting cautious sentiment and potential concerns about economic recovery and stability in the region.
Impact on EUR/USD Pair Amid US Economic Developments and Fed Commentary
On the US front, the US dollar has been showing signs of weakness and continues to be under pressure following the release of recent disappointing economic data. This has heightened expectations that the Federal Reserve will start the Federal Reserve's rate-cutting cycle this year.
Meanwhile, comments by Fed Governor Michelle Bowman indicate a cautious stance on rate cuts due to upside risks to inflation.
On the data front, US economic indicators showed mixed results with Initial Jobless Claims for the week ending June 21 coming in better than expected at 233,000 new claims, below the forecast of 236,000 and down from the previous week’s 238,000.
However, the four-week average edged up to 236,000, although the latest week’s figure remained below this average.
Meanwhile, US Gross Domestic Product (GDP) for Q1 met expectations, revised slightly higher to 1.4% from the initial 1.3%. Core Personal Consumption Expenditures in Q1 also saw a slight increase, rising to 3.7% quarter-on-quarter compared to the expected 3.6%.
Therefore, the US dollar's weakness, fueled by disappointing economic data and expectations of Federal Reserve policy easing, could bolster the EUR/USD pair. However, cautious Fed comments on inflation risks may temper any significant euro gains against the dollar.
EUR/USD - Technical Analysis
The EUR/USD pair is trading at $1.06972, down 0.16% on the day. The 4-hour chart highlights critical price levels, with the pivot point set at $1.0700. Immediate resistance is located at $1.0713, followed by $1.0727 and $1.0745. On the downside, immediate support is found at $1.0686, with further support levels at $1.0671 and $1.0655.
The Relative Strength Index (RSI) is currently at 48, indicating neutral momentum and suggesting that the market is neither overbought nor oversold. The 50-day Exponential Moving Average (EMA) is at $1.0707, acting as a key resistance level. The EUR/USD needs to break above this level to indicate further bullish momentum.
Traders should consider selling positions below the pivot point of $1.0700, with a target of the first support level at $1.06725. A break below this level could pave the way for further declines towards $1.0671 and $1.0655. Conversely, if the pair moves above the immediate resistance at $1.0713, it could target the next resistance levels at $1.0727 and $1.0745.
In summary, while EUR/USD is experiencing a slight downturn, the overall outlook remains bearish below the pivot point of $1.0700.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD is trading at $1.06927, down 0.19%, indicating continued bearish pressure.
- The pivot point at $1.0699 is critical for determining further market direction.
- RSI at 36 and 50-day EMA at $1.0712 highlight a bearish sentiment and resistance.
The EUR/USD pair is currently trading at $1.06927, reflecting a decline of 0.19%. The 4-hour chart highlights a pivot point at $1.0699, which serves as a crucial indicator for the pair's direction. Immediate resistance levels are noted at $1.0716, $1.0727, and $1.0745, while immediate support is found at $1.0672, followed by $1.0655 and $1.0641.
The Relative Strength Index (RSI) is positioned at 36, suggesting a bearish momentum in the market. Additionally, the 50-day Exponential Moving Average (EMA) at $1.0712 indicates a resistance level close to the current price, reinforcing the bearish outlook.
The technical indicators suggest that EUR/USD remains under pressure, with a bearish trend below the pivot point of $1.0699. A break below this level could trigger further declines towards the immediate support at $1.0672, and potentially lower towards $1.0655 and $1.0641.
Conversely, if the pair manages to break above the immediate resistance at $1.0716, it could signal a shift towards a bullish trend, targeting higher resistance levels at $1.0727 and $1.0745.
For traders, the recommended strategy is to sell below $1.06982, aiming for a take profit at $1.06762, with a stop loss set at $1.07109.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.06982
Take Profit – 1.06762
Stop Loss – 1.07109
Risk to Reward – 1: 1.7
Profit & Loss Per Standard Lot = +$220/ -$127
Profit & Loss Per Mini Lot = +$22/ -$12
EUR/USD Price Analysis – June 26, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair has been experiencing significant bearish pressure recently, falling below the 1.0685 level. This decline shows growing concerns over the Euro's near-term outlook amidst uncertainties surrounding European Union legislative elections and potential policy shifts within the European Central Bank (ECB).
It should be noted that the recent snap election announcement in France, following defeats for President Emmanuel Macron's party, has heightened market concerns about political instability in the Eurozone.
Economic indicators from Germany, the largest economy in the Eurozone, also reflect a troubling trend, with the IFO Expectations index unexpectedly falling. This suggests weaker economic prospects and has reduced investor confidence in the Euro.
Fed Maintains Hawkish Guidance on Interest Rates and Bullish US Dollar: Impact on EUR/USD Pair
On the US front, the Federal Reserve's commitment to maintaining its current interest rate framework has bolstered the US Dollar against its major counterparts, including the Euro.
Fed policymakers, led by recent comments from Governor Michelle Bowman, have signaled a reluctance to consider rate cuts in the near term, citing the need for sustained declines in inflationary pressures before any policy easing measures are entertained.
This hawkish stance contrasts sharply with market expectations, where investors had priced in potential rate cuts amid softer inflation data from the United States.
The prospect of a prolonged period of higher interest rates in the US has attracted capital flows into the Dollar, heightening its appeal as a safe-haven currency and exerting downward pressure on the EUR/USD pair.
Fears Over Eurozone Elections Intensify, ECB Rate Cut Expectations Grow: Impact on EUR/USD Pair
On the other hand, the Eurozone faces heightened political uncertainty following President Macron's call for a snap election in France, amid a resurgence of support for far-right parties.
This political turbulence has injected fresh volatility into Euro pairs, including the EUR/USD, as investors weigh the potential implications for Eurozone economic stability and policy continuity.
At the same time, worsening economic signals from Germany have led to expectations that the ECB might lower interest rates repeatedly to boost growth and inflation.
This possibility of more monetary easing has pushed down the Euro against the US Dollar, as investors foresee different paths for interest rates between the ECB and the Fed.
EUR/USD - Technical Analysis
The EUR/USD pair is currently trading at $1.06927, reflecting a decline of 0.19%. The 4-hour chart highlights a pivot point at $1.0699, which serves as a crucial indicator for the pair's direction.
Immediate resistance levels are noted at $1.0716, $1.0727, and $1.0745, while immediate support is found at $1.0672, followed by $1.0655 and $1.0641.
The Relative Strength Index (RSI) is positioned at 36, suggesting a bearish momentum in the market. Additionally, the 50-day Exponential Moving Average (EMA) at $1.0712 indicates a resistance level close to the current price, reinforcing the bearish outlook.
The technical indicators suggest that EUR/USD remains under pressure, with a bearish trend below the pivot point of $1.0699. A break below this level could trigger further declines towards the immediate support at $1.0672, and potentially lower towards $1.0655 and $1.0641.
Conversely, if the pair manages to break above the immediate resistance at $1.0716, it could signal a shift towards a bullish trend, targeting higher resistance levels at $1.0727 and $1.0745.
For traders, the recommended strategy is to sell below $1.06982, aiming for a take profit at $1.06762, with a stop loss set at $1.07109.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Immediate resistance for EUR/USD at $1.07217, $1.07356, $1.07508.
- Support levels at $1.06865, $1.06720, and $1.06553 are critical.
- RSI at 52 indicates a neutral sentiment; cautious bullish outlook above $1.06987.
EUR/USD is trading at $1.07094, showing no significant change. The pivot point is positioned at $1.06987, serving as a crucial indicator for the next potential moves.
Immediate resistance levels are observed at $1.07217, $1.07356, and $1.07508. These levels highlight potential upward targets, indicating a bullish sentiment if the price stays above the pivot point.
On the downside, immediate support is found at $1.06865, with further support at $1.06720 and $1.06553. These support levels are vital in preventing a sharp decline, offering traders key entry points for long positions.
The Relative Strength Index (RSI) stands at 52, indicating a neutral market sentiment. The 50-day Exponential Moving Average (EMA) is positioned at $1.07206, suggesting the current price is slightly below this average, which might act as a resistance level in the short term.
The technical indicators suggest a cautious bullish outlook for EUR/USD. Traders should consider a buy position above $1.06991, targeting a take profit at $1.07506. A stop loss at $1.06719 is recommended to mitigate potential losses.
Conclusion: The EUR/USD pair shows a potential bullish trend above the pivot point of $1.06987.
EUR/USD - Trade Ideas
Entry Price – Buy Above 1.06991
Take Profit – 1.07506
Stop Loss – 1.06719
Risk to Reward – 1: 1.89
Profit & Loss Per Standard Lot = +$515/ -$272
Profit & Loss Per Mini Lot = +$51/ -$27
EUR/USD Price Analysis – June 24, 2024
Daily Price Outlook
Despite the preliminary HICP PMI report for June pointing to a slowdown in the Eurozone economy, the EUR/USD currency pair maintained its upward trend and remained well-bid around the 1.0731 level, hitting an intraday high of 1.0736.
However, the reason for its bullish bias could be linked to the bearish US dollar, which lost ground on the growing speculation that the Federal Reserve (Fed) will start reducing interest rates in the September meeting and may deliver two rate cuts this year.
This undermined the US dollar and contributed to the gains in the EUR/USD pair.
Furthermore, the upticks in the EUR/USD pair were bolstered after the Euro delivered an upbeat performance against its peers as investors digested political uncertainty in France ahead of the first round of legislative elections scheduled for June 30.
Impact of Fed Speculation and Economic Data on the USD and EUR/USD Pair
On the US front, the broad-based US dollar lost its traction and edged lower as risk appetite improved amid speculation that the Federal Reserve (Fed) might initiate interest rate cuts starting in their September meeting, with expectations of two cuts by year-end.
Despite strong preliminary US PMI reports for June showing robust economic activity, including a 26-month high in services and a three-month high in manufacturing, the dollar's earlier gains faded.
This shift in sentiment was driven by market interpretations of the Fed's increasingly dovish stance in response to easing inflationary pressures. Investors are now pricing in a higher likelihood of multiple rate cuts in 2024, causing US Treasury bond yields to decline and supporting higher gold prices.
On the data front, the US composite PMI for June edged up slightly to 54.6, signaling a strong end to the second quarter for the economy and marking its highest level since April 2022. Input prices moderated to 56.6 from 57.2, while output prices also slowed to 53.5, indicating some of the smallest increases in four years.
These figures suggest a balanced outlook for inflation despite robust economic activity. The combination of easing price pressures and strong PMI readings underpins expectations for the Fed to adopt a more accommodative monetary policy stance, influencing market dynamics and the dollar's recent performance.
Therefore, the improved risk appetite and expectations of Fed rate cuts weakened the US dollar, supporting the EUR/USD pair's upward movement amidst strong US PMI data and easing inflation concerns.
Impact of Political Uncertainty and Economic Data on the EUR/USD Pair
On the EUR front, the Euro showed resilience in Monday's session amid political uncertainty in France ahead of the first round of legislative elections on June 30. Despite a preliminary HCOB PMI report indicating a slowdown in the Eurozone economy with weaker-than-expected Manufacturing and Services PMIs, the Euro managed to perform well against its counterparts.
This performance was bolstered by market expectations of potential rate cuts by the European Central Bank (ECB) in response to the economic slowdown. Investors' focus on political developments in France and economic indicators continues to influence the Euro's movement in the currency markets.
Despite weaker economic data and political uncertainties in France, the Euro maintained strength against other currencies, including the US dollar. This resilience suggests market expectations of ECB rate cuts are influencing the EUR/USD pair's dynamics.
EUR/USD - Technical Analysis
EUR/USD is trading at $1.07094, showing no significant change. The pivot point is positioned at $1.06987, serving as a crucial indicator for the next potential moves. Immediate resistance levels are observed at $1.07217, $1.07356, and $1.07508.
These levels highlight potential upward targets, indicating a bullish sentiment if the price stays above the pivot point.
On the downside, immediate support is found at $1.06865, with further support at $1.06720 and $1.06553. These support levels are vital in preventing a sharp decline, offering traders key entry points for long positions.
The Relative Strength Index (RSI) stands at 52, indicating a neutral market sentiment. The 50-day Exponential Moving Average (EMA) is positioned at $1.07206, suggesting the current price is slightly below this average, which might act as a resistance level in the short term.
The technical indicators suggest a cautious bullish outlook for EUR/USD. Traders should consider a buy position above $1.06991, targeting a take profit at $1.07506. A stop loss at $1.06719 is recommended to mitigate potential losses.
Conclusion: The EUR/USD pair shows a potential bullish trend above the pivot point of $1.06987.
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EUR/USD Price Analysis – June 21, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair continued its bearish trend and remained under pressure around the 1.0683 level, hitting an intraday low of 1.0671. The downward trend was attributed to disappointing Eurozone preliminary PMI data and German Preliminary Manufacturing PMI, indicating a loss of economic momentum. Additionally, political uncertainty in France, the Eurozone's second-largest economy, was seen as another key factor keeping the EUR/USD pair lower.
Impact of Eurozone PMI Data on EUR/USD Pair
On the EUR front, the major currency pair dropped to a six-week low around 1.0670 as the Euro weakened. This followed disappointing preliminary PMI data from the Eurozone, indicating a slowdown in economic momentum.
On the data front, the latest HCOB purchasing managers index survey revealed a downturn in the Eurozone's manufacturing sector, with the PMI dropping to 45.6 in June from 47.3 in May, falling short of expectations and hitting a six-month low. The services sector also showed deterioration, declining to 52.2 from 53.2, below the anticipated 53.5 and marking a three-month low.
Meanwhile, the overall Eurozone PMI Composite fell sharply to 50.8, well below forecasts and May's reading, indicating a slowdown in economic activity. In Germany, manufacturing contracted further to 43.4, below expectations, while services weakened to 53.5, contributing to a decline in the composite output index to 50.6, its lowest level in two months.
Therefore, the disappointing Eurozone PMI data led to a weakening Euro, pushing the EUR/USD pair to a six-week low near 1.0670. Investors reacted to signs of economic slowdown, impacting the currency's performance against the US Dollar.
Impact of US Economic Data and Fed Policy Expectations on EUR/USD Pair
On the US front, the widely traded US dollar has been showing signs of weakness and continues to be under pressure following the release of recent disappointing economic data. This has heightened expectations that the Federal Reserve will soon start to relax its policies. While Federal Reserve officials initially expressed a preference for keeping interest rates elevated, market sentiment has since shifted.
Investors now believe there is a strong possibility of an interest rate cut at the next policy meeting, but they only expect one cut to occur this year. This anticipated policy shift is a response to the weakening economic indicators and the need to stimulate economic growth.
On the economic data front, the US Department of Labor reported that new filings for unemployment benefits fell to 238,000 in the week ending June 15, slightly exceeding the anticipated 235,000. Meanwhile, the Commerce Department's Census Bureau noted a 5.2% decrease in Housing Starts for May, dropping to a seasonally adjusted annual rate of 982,000 units. Building Permits also saw a decline of 2.9% to 949,000 units during the same period.
Furthermore, the Philadelphia Fed Manufacturing Index unexpectedly declined to 1.3 in June from 4.5 in the previous month, continuing its streak of five consecutive months in positive territory despite the
Hence, the EUR/USD pair could experience upward pressure if the Federal Reserve follows through with the expected rate cuts, juxtaposed against Eurozone economic uncertainties and potential shifts in market sentiment favoring the Euro.
EUR/USD - Technical Analysis
EUR/USD is trading at $1.07190, up 0.16% in the early European session. The pivot point at $1.07506 is a crucial level to watch for potential shifts in market sentiment. Immediate resistance is found at $1.07508, with further resistance at $1.07706 and $1.07932. These levels indicate where upward momentum might face selling pressure. On the downside, immediate support is at $1.06865, followed by $1.06720 and $1.06553, which could act as potential buy zones if the price declines.
Technical indicators reveal that the Relative Strength Index (RSI) stands at 46, suggesting the asset is in a neutral zone and not overbought or oversold. The 50-day Exponential Moving Average (EMA) is positioned at $1.07279, indicating a slight bullish trend as the current price is hovering around this average. This technical setup suggests a mixed outlook, with potential for upward movement if the price can sustain above the pivot point.
Given this outlook, traders might consider a buy entry above $1.06991, with a take profit target at the pivot point of $1.07506 and a stop loss at $1.06719. This strategy leverages the immediate support below the current price and targets a modest upward move towards the pivot point.
In summary, EUR/USD is currently showing modest gains with a key focus on the pivot point at $1.07506. The immediate resistance at $1.07508 and the support at $1.06865 will be crucial in determining the short-term direction for the pair. The RSI at 46 and the 50-day EMA at $1.07279 suggest a cautious but potentially optimistic outlook for the euro against the dollar.
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