EURUSD | Level 1.1. strategy approach!
Analysis of the EUR/USD Situation:
Current Situation and Support/Resistance Levels: EUR/USD remains in a positive position, below the 1.1000 threshold. Key support and resistance levels to consider are:
Support: If EUR/USD falls below the 2024 low of 1.0876, it could approach the 200-day Simple Moving Average (SMA) at 1.0846. Breaking this level might lead to the December 2023 lows at 1.0723, followed by the October 2023 weekly and yearly lows at 1.0495 and 1.0448, and finally the psychological level of 1.0400.
Resistance: A breakout from the short-term consolidation could reach the recent high area at 1.0998 and, if surpassed, might indicate a move towards 1.1139.
Technical Indicators:
The MACD is showing signs of recovery, indicating a potential short-term rebound.
The RSI has risen above 53, suggesting some bullish momentum.
Influence of the US Dollar and Fed Policy:
Higher-than-expected US CPI in December 2023 strengthened the dollar, leading investors to revise expectations of Fed rate cuts in Q2.
Comments from Fed's L. Mester highlight that rate cuts are not being considered yet and further evidence of economic progress is needed. She emphasized the importance of a consistent decrease in inflation before considering possible rate cuts.
Relevant Economic Data:
No data releases in the domestic calendar and a rise in US headline CPI by 3.4% year-to-year to December, and 3.9% from the previous year for Core CPI.
Initial weekly claims increased to 202K in the week ending January 6.
Outlook:
The optimistic outlook for the EUR/USD pair is expected to remain unchanged as long as it stays above the 200-day SMA.
However, economic data and Fed policy will continue to significantly influence the pair, especially considering market caution and anticipation of further data and ECB and Fed speeches.
In conclusion, the EUR/USD pair is in a delicate phase, with clear support and resistance levels to monitor. Fed policy and economic data will play a crucial role in determining the direction of the exchange rate. Personally, I predict a price rebound in the support zone with an NFP spike, a neutral week in conclusion, and a price outlook in the 1.111 area for next week. Greetings from Nicola and best wishes for successful trading to everyone.
Current Situation and Support/Resistance Levels: EUR/USD remains in a positive position, below the 1.1000 threshold. Key support and resistance levels to consider are:
Support: If EUR/USD falls below the 2024 low of 1.0876, it could approach the 200-day Simple Moving Average (SMA) at 1.0846. Breaking this level might lead to the December 2023 lows at 1.0723, followed by the October 2023 weekly and yearly lows at 1.0495 and 1.0448, and finally the psychological level of 1.0400.
Resistance: A breakout from the short-term consolidation could reach the recent high area at 1.0998 and, if surpassed, might indicate a move towards 1.1139.
Technical Indicators:
The MACD is showing signs of recovery, indicating a potential short-term rebound.
The RSI has risen above 53, suggesting some bullish momentum.
Influence of the US Dollar and Fed Policy:
Higher-than-expected US CPI in December 2023 strengthened the dollar, leading investors to revise expectations of Fed rate cuts in Q2.
Comments from Fed's L. Mester highlight that rate cuts are not being considered yet and further evidence of economic progress is needed. She emphasized the importance of a consistent decrease in inflation before considering possible rate cuts.
Relevant Economic Data:
No data releases in the domestic calendar and a rise in US headline CPI by 3.4% year-to-year to December, and 3.9% from the previous year for Core CPI.
Initial weekly claims increased to 202K in the week ending January 6.
Outlook:
The optimistic outlook for the EUR/USD pair is expected to remain unchanged as long as it stays above the 200-day SMA.
However, economic data and Fed policy will continue to significantly influence the pair, especially considering market caution and anticipation of further data and ECB and Fed speeches.
In conclusion, the EUR/USD pair is in a delicate phase, with clear support and resistance levels to monitor. Fed policy and economic data will play a crucial role in determining the direction of the exchange rate. Personally, I predict a price rebound in the support zone with an NFP spike, a neutral week in conclusion, and a price outlook in the 1.111 area for next week. Greetings from Nicola and best wishes for successful trading to everyone.
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