EURUSD Continues to Rise, Powell Confident in Controlling Inflation【July 16, 2024】

Fundamental Analysis

• Trump’s approval ratings are on the rise, showcasing his strength.
• Powell, the Chair of the Federal Reserve, expresses confidence in controlling inflation.

EURUSD technical analysis

Analyzing the daily EURUSD chart, it is trading within a large triangle. It has broken above the descending trend line and is targeting the upper line of the triangle. Meanwhile, market sentiment shows that 91% of positions are short on EURUSD, indicating a tilt in positions. When positions are tilted, speculators may target stop-loss orders and push the price upward.

From a fundamental perspective, with the Fed Chair showing confidence in controlling inflation and expectations for a rate cut rising, this could lead to USD selling. However, many analysts expect USD to strengthen following the Trump shooting incident.

EURUSD might aim for the upper limit of the triangle and, if it touches it, could plummet. The presidential election will intensify after summer. We will watch the future developments closely.

Day trading strategy (1 hour)

Analyzing the 1-hour EURUSD chart, it is supported by the 52-period moving average and rising. There is also a cloud below providing support. Market sentiment shows over 90% of positions are short, increasing selling pressure.

A correction might be coming. The strategy is to try buying the dips. The ECB Governing Council meeting is scheduled for this week, which may cause some fluctuations in EURUSD.

Entry Strategy: Buy at 1.088 USD, close at 1.092 USD, and stop at 1.085 USD.

Support/Resistance lines

The following support and resistance lines should be considered in the future.

1.0920 USD – Fibonacci Expansion

Market Sentiment

EURUSD: Short: 91%, Long: 9%

Featured Currency Pair of the Week (EURJPY)

Due to forex intervention, EURJPY is trading around 172.4 JPY. Last Friday, there were reports of a rate check for EURJPY, indicating possible sensitivity. The RSI is around 56, showing a steady upward trend. With the ECB Governing Council meeting scheduled, there is uncertainty about whether there will be forex intervention. While active buying is not advisable, carefully buying the dips might be a good approach. We will closely monitor the situation.

Today’s important economic indicators

*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.