Markets Analysis

Fundamental Analysis

• Major U.S. indices continue to fall, selling pressure on AI stocks
• Fed Chair Jerome Powell reiterated in congressional testimony that the Fed will raise interest rates twice this year; rate cut speculation recedes
• The yen continued to weaken against the U.S. dollar on expectations that interest rates will remain high
• U.K. inflation beat market expectations; U.K. policy rate announcement scheduled for today
• Eurodollar rises, may test the USD 1.10 resistance zone again amid the all-around euro strength

EURUSD Technical Analysis

The EURUSD is trading higher across the board. After Fed Chair Jerome Powell’s congressional testimony, the dollar weakened and the EURUSD broke above its range. It is currently hovering around USD 1.09950, which corresponds to 61.8% of the Fibonacci Expansion.

Analysis of the daily chart confirms that the pair has broken above the clouds on the Ichimoku Chart. The lagging line is above the candlestick and the conversion line is above the base line, thus completing the bullish signal of “three-way positive rotation”. Therefore, the medium- to long-term view can be expected to be up.

Day Trading Strategy (Hourly)

The day-trade policy is to buy on the push side, as the RSI is now around 70 and is expected to fall back. This is a market where we want to pull back enough to buy on the pushback. Since USD 1.0975 is a very large support zone, we expect a rebound here.

Analyzing market sentiment, we see a considerable buildup of selling positions, which could lead to a stronger rally with stop losses rolled in. We think the target price is USD 1.1025, which is a major milestone, and USD 1.1050, which corresponds to 100% of the expansion.

Support and Resistance Lines

The resistance line to be considered in the future is as follows

1.10 USD – Very strong resistance zone
1.0975 USD – Strong support zone
1.0960 USD – Pivot point

Market Sentiment

EURUSD　Sell: 87% Buy: 13%

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.