Fundamental Analysis

• U.S. interest rates have risen to the 4.2% range, leading to a noticeable trend of USD strength.
• USDJPY has surpassed 153 JPY, reflecting the interest rate differential between Japan and the U.S.
• Gold has also reached new all-time highs for five consecutive days.

EURUSD technical analysis

Analyzing the daily chart of EURUSD, the pair has clearly broken below the 200-day moving average, continuing the trend of EUR selling. Across the forex market, the rising U.S. interest rates are sustaining USD strength, with EURUSD falling below the round number of 1.08 USD. The price is moving between the -1σ and -2σ lines of the Bollinger Bands, indicating a downward band walk.

As the U.S. presidential election approaches, reports suggest Trump is in the lead. Both Harris and Trump are advocating for aggressive fiscal policies, and regardless of who wins, there is speculation that U.S. inflation rates may rise again, which is contributing to the increase in interest rates.

The important past low of 1.0777 USD is being closely watched. If this price level is broken, there is a possibility that the market will aim for the round number of 1.07 USD.

Day trading strategy (1 hour)

Analyzing the 1-hour chart of EURUSD, the price has touched the +3σ line of the Bollinger Bands and is seeing a small rebound. While some adjustment is expected, the overall trend of USD strength is unlikely to change. Even though the ECB implemented a rate cut in its recent meeting, the probability that the Fed will hold rates steady, rather than cutting them, has increased.

However, looking at market sentiment, it’s clear that the pair is oversold. The daily RSI (14) is also at 23, making a short-term rebound likely.

The strategy here would be to focus on selling at the rebound. For day trading, consider selling at 1.08 USD or near the 10-day moving average. Set a stop if the price exceeds 1.088 USD. The target for take profit is around 1.07 USD.

Support/Resistance lines

The following are key support and resistance lines to consider:

• 1.0850 USD – 10-day moving average
• 1.08 USD – Round number
• 1.07 USD – Round number

Market Sentiment

EURUSD Short: 9% Long: 91%

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.