EUR/USD Set for Positive Month as Dollar Rally Stalls
With EUR/USD set to post its first positive month of the year, let’s take a look at why the dollar rally has faltered, the key levels to watch, and the trend continuation pattern emerging on lower timeframes.
Dollar Rally Falters
The rally in the US dollar has faltered in recent weeks as traders bet on falling inflation giving the Federal Reserve more room to cut interest rates. After rising as much as 5% this year by mid-April, the dollar is now experiencing its first down month of 2024. This shift followed the latest inflation data, which aligned with forecasts and showed a decrease in consumer price growth, easing concerns that the Fed might need to raise rates further to control inflation. As a result, traders are now expecting the Fed to implement two quarter-point rate cuts this year, leading to a 1.4% drop in the dollar this month despite a partial rebound.
EUR/USD Daily Candle Chart: Keltner Channel Ping Pong
EUR/USD is set to post its first positive month of the year. The Keltner Channels have contained its price action so far in 2024 with prices bouncing off channels like a ping pong ball. Having bounced from the bottom channel in April, EUR/USD has rallied towards the top of the Keltner Channel, breaking and closing above a descending trendline that intersected the January and March highs. The 20-day EMA, which is the basis of the Keltner Channel (middle line), has risen towards the top of the broken trendline, potentially attracting buying pressure should EUR/USD’s uptrend resume.
EUR/USD Daily Candle Chart
Past performance is not a reliable indicator of future results
EUR/USD 4hr Candle Chart: Bull Flag Forming
Drilling down to the 4-hour candle chart reveals that EUR/USD is building momentum. Mapping the series of higher swing lows forms a bullish trendline fan, signalling increasing momentum. Recent price action has seen EUR/USD pull back, forming a small descending retracement channel or bull flag. This bullish consolidation pattern can be used by swing traders to time entries into long positions.
EUR/USD 4hr Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.84% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Dollar Rally Falters
The rally in the US dollar has faltered in recent weeks as traders bet on falling inflation giving the Federal Reserve more room to cut interest rates. After rising as much as 5% this year by mid-April, the dollar is now experiencing its first down month of 2024. This shift followed the latest inflation data, which aligned with forecasts and showed a decrease in consumer price growth, easing concerns that the Fed might need to raise rates further to control inflation. As a result, traders are now expecting the Fed to implement two quarter-point rate cuts this year, leading to a 1.4% drop in the dollar this month despite a partial rebound.
EUR/USD Daily Candle Chart: Keltner Channel Ping Pong
EUR/USD is set to post its first positive month of the year. The Keltner Channels have contained its price action so far in 2024 with prices bouncing off channels like a ping pong ball. Having bounced from the bottom channel in April, EUR/USD has rallied towards the top of the Keltner Channel, breaking and closing above a descending trendline that intersected the January and March highs. The 20-day EMA, which is the basis of the Keltner Channel (middle line), has risen towards the top of the broken trendline, potentially attracting buying pressure should EUR/USD’s uptrend resume.
EUR/USD Daily Candle Chart
Past performance is not a reliable indicator of future results
EUR/USD 4hr Candle Chart: Bull Flag Forming
Drilling down to the 4-hour candle chart reveals that EUR/USD is building momentum. Mapping the series of higher swing lows forms a bullish trendline fan, signalling increasing momentum. Recent price action has seen EUR/USD pull back, forming a small descending retracement channel or bull flag. This bullish consolidation pattern can be used by swing traders to time entries into long positions.
EUR/USD 4hr Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.84% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.