Fundamental Analysis

• With the decline in the U.S. 10-year yield, the USD has weakened, leading to a solid rise in EURUSD.
• Focus shifts to the Jackson Hole meeting, where the Fed Chair may pave the way for rate cuts.
• EURUSD encounters resistance around the 1.12 USD range, suggesting room for further gains.

EURUSD technical analysis

Analyzing the daily chart of EURUSD, we observe that EURUSD has surpassed the 1.110 USD level, establishing a strong uptrend. It is gradually moving away from the 10-day moving average, aiming for the 1.12 USD range, which contains previous highs and significant technical resistance.

From a broader perspective, after forming the first wave of the uptrend, EURUSD developed a triangle pattern. It has now decisively broken out of this triangle, which persisted for over a year since June 2023. Drawing a Fibonacci expansion, the 61.8% level corresponds to 1.1225 USD.

Given that the RSI with a 14-period setting is at 73, caution is warranted for a potential temporary correction, though the overall market conditions suggest a high probability of continued upward momentum.

Day trading strategy (1 hour)

When analyzing the 1-hour EURUSD chart, the pair remains in a solid uptrend, trading around 1.1110 USD. However, considering the slight distance from the 10MA on the daily chart, the possibility of a pullback should be considered.

It would be prudent to look for buying opportunities during pullbacks to ride the upward trend.

Today’s day trading strategy is to buy on dips. Enter a new buy position around 1.1065 USD, with a target at 1.1225 USD and a stop at 1.1020 USD.

Support/Resistance lines

The following support and resistance levels should be considered moving forward:

1.1225 USD – Fibonacci expansion 61.8%
1.1140 USD – Previous highs

Market Sentiment

EURUSD Sell: 90% Buy: 10%

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.