Eurodollar Breaks Below Channel Floor, ECB President Hints at June Rate Cut【January 19, 2024】

January 19, 2024

Markets Analysis

Fundamental Analysis

  • At the Davos meeting, President Lagarde hints at rate cuts, Eurodollar searches for direction
  • US Nasdaq hits new highs, mixed results in US economic indicators
  • Eurodollar breaks out of the channel, next downside target around USD 1.0825

EURUSD Technical Analysis

Analyzing the daily chart of the Eurodollar. It has broken below the lower line of the ascending channel, turning it into a resistance line. The Ichimoku Cloud is close by, indicating a state of being sandwiched between strong support and resistance bands. Despite President Lagarde’s comments at the Davos meeting, the market is searching for triggers to strengthen the Eurodollar sell-off.

RSI is at 47, indicating a downward trend. The past RSI support line was around 48, suggesting the possibility of a sudden increase in downward pressure. The next downside target is anticipated to be USD 1.0824.


Day Trading Strategy (1-Hour Chart)

Analyzing the 1-hour chart of the Eurodollar market. Currently, it’s in a low range, showing a double bottom formation, with two rebounds at USD 1.085. The RSI is hovering around 50, indicating the market is searching for direction.

It’s moving within the Ichimoku Cloud, suggesting an unstable market condition. USD 1.0890 corresponds to the 50% Fibonacci retracement on the daily chart and is expected to act as a strong resistance line.
The possibility of increased Euro selling due to statements about the timing of the EU’s rate cuts should also be considered.

The day trading approach is to sell, with a sell entry around USD 1.0890, taking profit near USD 1.0850, and setting a stop at USD 1.0915.

Support and Resistance Lines

Upcoming significant support and resistance lines:

USD 1.0824 – A major monthly support line


Market Sentiment

EURUSD Sell: 38%, Buy: 62%

Today’s Important Economic Indicators

Economic Indicators and EventsJST (Japan Standard Time)
Japan Nationwide Core CPI8:30
UK Retail Sales16:00
Canadian Retail Sales22:30
US Existing Home SalesMidnight

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

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