EURUSD| Will the level 1.11 be the next high?
Current Trading Range: The EUR/USD pair has been traded within a narrow range, roughly between 1.0930 and 1.0925. This suggests a consolidation phase following recent movements.
Impact of Upcoming CPI Data: The market is anticipating the forthcoming U.S. Consumer Price Index (CPI) data. Scheduled for release on Thursday, these figures might significantly influence the pair, potentially breaking the current trading range.
Recent Price Movements: Initially, the pair exhibited a slight upward trend earlier this week but retreated to around the 1.0900 level. This level seems to be providing support, partly due to what has been termed 'Turnaround Tuesday'.
USD Strength and Safe Haven Appeal: The USD Index (DXY) has reached new two-day highs near 102.70, propelled by investors turning to safe-haven assets. This shift is partially attributed to caution ahead of the U.S. inflation data and consumer sentiment reports.
Influence of Bond Yields: The unclear direction in U.S. yields across different timelines, along with the rise in German 10-year bund yields to around 2.20%, are also affecting EUR/USD dynamics.
Central Bank Policies: The differing approaches of the Federal Reserve and the European Central Bank (ECB) regarding interest rate adjustments are crucial. The Fed has been more proactive, whereas the ECB maintains a more subdued approach, with potential rate cuts anticipated later in the year.
Macro-Economic Factors: Disappointing industrial production figures from Germany have fostered a bearish sentiment for the Euro. However, an improvement in the unemployment rate across the broader Eurozone has provided some relief.
Technical Analysis: The EUR/USD pair is consolidating near 1.0930. Resistance is anticipated at 1.0950, followed by the psychological barrier at 1.1000. A break above 1.1000 could lead the pair to retest the previous week’s high at 1.1038. However, the 14-day Relative Strength Index (RSI) falling below 50 indicates bearish momentum.
In summary, the EUR/USD pair is currently in a consolidation stage, influenced by the expectations of key economic data releases, central bank policies, and macroeconomic factors. Technical indicators point to a bearish momentum, but upcoming data could potentially lead to significant movements. I have highlighted a possible bullish scenario with a target of 1.11. Currently, the price is above the support zone and is consolidating. Without significant macro data, the price showed little movement in Tuesday's session. I will share further updates if I develop additional thoughts on EUR/USD. Best wishes and happy trading to everyone, from Nicola.
Impact of Upcoming CPI Data: The market is anticipating the forthcoming U.S. Consumer Price Index (CPI) data. Scheduled for release on Thursday, these figures might significantly influence the pair, potentially breaking the current trading range.
Recent Price Movements: Initially, the pair exhibited a slight upward trend earlier this week but retreated to around the 1.0900 level. This level seems to be providing support, partly due to what has been termed 'Turnaround Tuesday'.
USD Strength and Safe Haven Appeal: The USD Index (DXY) has reached new two-day highs near 102.70, propelled by investors turning to safe-haven assets. This shift is partially attributed to caution ahead of the U.S. inflation data and consumer sentiment reports.
Influence of Bond Yields: The unclear direction in U.S. yields across different timelines, along with the rise in German 10-year bund yields to around 2.20%, are also affecting EUR/USD dynamics.
Central Bank Policies: The differing approaches of the Federal Reserve and the European Central Bank (ECB) regarding interest rate adjustments are crucial. The Fed has been more proactive, whereas the ECB maintains a more subdued approach, with potential rate cuts anticipated later in the year.
Macro-Economic Factors: Disappointing industrial production figures from Germany have fostered a bearish sentiment for the Euro. However, an improvement in the unemployment rate across the broader Eurozone has provided some relief.
Technical Analysis: The EUR/USD pair is consolidating near 1.0930. Resistance is anticipated at 1.0950, followed by the psychological barrier at 1.1000. A break above 1.1000 could lead the pair to retest the previous week’s high at 1.1038. However, the 14-day Relative Strength Index (RSI) falling below 50 indicates bearish momentum.
In summary, the EUR/USD pair is currently in a consolidation stage, influenced by the expectations of key economic data releases, central bank policies, and macroeconomic factors. Technical indicators point to a bearish momentum, but upcoming data could potentially lead to significant movements. I have highlighted a possible bullish scenario with a target of 1.11. Currently, the price is above the support zone and is consolidating. Without significant macro data, the price showed little movement in Tuesday's session. I will share further updates if I develop additional thoughts on EUR/USD. Best wishes and happy trading to everyone, from Nicola.
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