Fundamental Analysis

• The US ISM Manufacturing Index exceeds market expectations.
• The probability of a US rate cut in June falls below 50%, leading to a stronger dollar as high interest rates are expected to continue.
• USDJPY rises to the 151 range, while EURUSD and GBPUSD decline.

EURUSD Technical Analysis

Analysis of the daily chart for EURUSD shows a decline, with the pair trading around 1.075 USD. The -2σ line of the Bollinger Bands is acting as a support line, slightly slowing the decline.

Following the positive results of US economic indicators, the probability of a rate cut in June has decreased. As long as the US economy does not weaken, there is no reason to cut rates. The currency market is moving towards a stronger dollar, not only for EURUSD but also for GBPUSD, while USDJPY is rising.

The MACD for EURUSD shows the histogram forming a trough. It is expected that the pair will likely decline towards the next support line at 1.0709 USD.

Day Trading Strategy (1-Hour Chart)

Analysis of the 1-hour chart for EURUSD indicates a strengthening downward trend, with the ADX at 35 and -DI also at 35. The clarity of a stronger dollar, combined with increased volatility following the Easter holiday, suggests the possibility of a trend gaining momentum.

This is a week to actively trade. The important US employment statistics are scheduled for this week.

EURUSD is expected to decline towards 1.0709 USD. The day trading strategy would be to execute a market sell around 1.0735 USD and buy back at 1.0709 USD. The stop loss is set a bit strictly at 1.0750 USD. Movement is anticipated following the release of the German Consumer Price Index.

Support and Resistance Lines

The following are important support and resistance lines to consider:

1.0709 USD as a major support line

Market Sentiment

EURUSD Sell: 17% Buy: 83%

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.