Fundamental Analysis

• US CPI exceeds expectations, USD/JPY surges to 150.88 JPY momentarily.
• Speculation for a US rate cut recedes, with the probability of a May rate cut dropping to 32%.
• Gold plummets, falling below 2000 USD to trade at 1992 USD.

EURUSD Technical Analysis

Analyzing the daily chart of EUR/USD, the pair has updated its recent lows to around 1.0710 USD due to a sharp appreciation of the dollar. The US CPI exceeded expectations, with the core CPI rising for the first time in eight months. At 3.1%, it disappointed the market, which had hoped for a figure in the 2% range, rapidly retracting rate cut speculation.
The Eurozone has contained inflation, with ECB officials hinting at a rate cut within the year. However, in the US, the failure to contain inflation casts doubt on any rate cuts within the year.

In an environment conducive to a stronger dollar, EUR/USD has fallen. It broke out below an upward trend line. Drawing Fibonacci expansion shows a target downside price of 1.0629 USD. The RSI is at 40, indicating a stable downward trend, suggesting there is still room for decline.

Day Trading Strategy (1-Hour Chart)

Analyzing the 1-hour chart of EUR/USD, a sharp decline has made it difficult to test lower than 1.07 USD. A short-term rise is expected. Drawing Fibonacci retracement from the high to low of yesterday’s large bearish candle suggests a rebound to around 1.0738 USD, corresponding to the 38.2% level, and possibly up to 1.0750 USD at the 50% level, where the Ichimoku Kinko Hyo baseline is currently situated.
Today’s day trading strategy is to sell on the rebound. Entry at 1.0738 USD, target at 1.0675 USD, and stop at 1.0775 USD.

As the RSI on the 1-hour chart approaches around 50, it sets the stage for a sell on the rebound. In this sense, it’s also important to keep an eye on the RSI value.

Support and Resistance Lines

Upcoming significant support and resistance lines:

1.0676 USD: Major support line
1.0628 USD: 61.8% Fibonacci level

Market Sentiment

EURUSD Sell: 39% Buy: 61%

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.