Markets Analysis

Fundamental Analysis

• The Eurozone Consumer Price Index fell below expectations, triggering a buying reaction for the euro.
• The U.S. FOMC announcement is scheduled for early tomorrow, which could significantly impact the dollar’s movement.
• Focus on the upcoming U.S. interest rate outlook. If there’s an increased possibility of a rate hike, the EUR/USD might be sold.

EURUSD Technical Analysis

Analyzing the 4-hour chart of the EUR/USD pair, the RSI has reversed at the 50 level. The 24-period moving average is currently above the price, acting as a support line. However, if movements below the 24-period moving average are observed, a bearish trend might continue.

As for economic indicators, the Eurozone’s CPI falling below market expectations has made the deceleration of inflation evident. On the other hand, the direction of the EUR/USD market could change significantly depending on the future outlook of U.S. policy rates. To capture short-term movements, it’s essential to monitor the movements of the 24-period moving average and the U.S. interest rate outlook.

Day Trading Strategy (Hourly)

Analyzing the 1-hour chart of the EUR/USD pair, the RSI continues to consolidate around the 50 level. The market is waiting for the FOMC results and the U.S. interest rate outlook. If it breaks below the 24-period moving average and the Ichimoku cloud, a decline to USD 1.0635 becomes likely.

The Fibonacci expansion’s 61.8% corresponds to USD 1.0635, and 100% corresponds to USD 1.0585. There’s a strong support zone at USD 1.0627, making it crucial to watch if it breaks below USD 1.062.

The recommended entry strategy is a short-term sell. Entry point at USD 1.0665, stop at USD 1.069, and profit target at USD 1.0640. Furthermore, if it breaks securely below USD 1.0620, USD 1.0585 becomes the next target.

Support and Resistance Lines

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

1.0635 USD- Fibonacci Level

Market Sentiment

EURUSD　Sell: 24% Buy: 76%

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.