EURUSD heading to $1.1200?
Updated
Fundamental Analysis
The US Dollar weakened due to disappointing economic data that showed an increase in Initial Jobless Claims by 5K more than anticipated. Additionally, the results of the Philadelphia Fed Manufacturing Survey fell short of the -18.2 forecast, coming in at -31.3 for April. However, the Fed's Beige Book report stated that economic activity remained unchanged in recent weeks, which helped support the USD. Furthermore, St. Louis Fed's Bullard continued to advocate for further rate hikes to combat inflation and recession fears, which further strengthened the USD.
Meanwhile, the Euro was buoyed by expectations that the European Central Bank (ECB) will continue to raise interest rates, although the size of these hikes will be data-dependent. ECB's chief economist Philip Lane emphasized that the health of the region's banks, as reported in the upcoming ECB Bank Lending Survey on May 2, will be crucial in determining whether the ECB will hike rates aggressively.
As of today, Thursday 20 April 2023, the EUR traded slightly higher in the 1.0970s against the USD after Wall Street's opening bell. However, the pair retreated from the recent highs of 1.1075 on April 14, as the USD regained strength on expectations that the Federal Reserve will continue raising interest rates.
Technical Analysis
Looking at the Daily Chart, the medium-term trend for EUR/USD has been upward since it bounced back from the September 2022 lows, and it's expected to persist. Although there was a slight dip in February 2023, EUR/USD managed to recover and hit new year-to-date highs above 1.1000 on April 13. We believe that price will keep pushing up one more time to reach the $1.12000 price level before seeing some major pullback, this move will take a few days, and possibly even a few weeks.
Looking at the H1 chart, the price has entered a range over the past few days. There are two potential outcomes: the price will continue to rise towards the recent high of $1.10800 and eventually break out to the upside after some pullback, or this latest range may be a corrective wave (a price accumulation) before seeing another bearish impulse. Regardless of which scenario unfolds, we anticipate that the price will continue to move upwards towards the 1.12000 price level. We will keep you updated on the progress of this chart before any significant price movement occurs.
The US Dollar weakened due to disappointing economic data that showed an increase in Initial Jobless Claims by 5K more than anticipated. Additionally, the results of the Philadelphia Fed Manufacturing Survey fell short of the -18.2 forecast, coming in at -31.3 for April. However, the Fed's Beige Book report stated that economic activity remained unchanged in recent weeks, which helped support the USD. Furthermore, St. Louis Fed's Bullard continued to advocate for further rate hikes to combat inflation and recession fears, which further strengthened the USD.
Meanwhile, the Euro was buoyed by expectations that the European Central Bank (ECB) will continue to raise interest rates, although the size of these hikes will be data-dependent. ECB's chief economist Philip Lane emphasized that the health of the region's banks, as reported in the upcoming ECB Bank Lending Survey on May 2, will be crucial in determining whether the ECB will hike rates aggressively.
As of today, Thursday 20 April 2023, the EUR traded slightly higher in the 1.0970s against the USD after Wall Street's opening bell. However, the pair retreated from the recent highs of 1.1075 on April 14, as the USD regained strength on expectations that the Federal Reserve will continue raising interest rates.
Technical Analysis
Looking at the Daily Chart, the medium-term trend for EUR/USD has been upward since it bounced back from the September 2022 lows, and it's expected to persist. Although there was a slight dip in February 2023, EUR/USD managed to recover and hit new year-to-date highs above 1.1000 on April 13. We believe that price will keep pushing up one more time to reach the $1.12000 price level before seeing some major pullback, this move will take a few days, and possibly even a few weeks.
Looking at the H1 chart, the price has entered a range over the past few days. There are two potential outcomes: the price will continue to rise towards the recent high of $1.10800 and eventually break out to the upside after some pullback, or this latest range may be a corrective wave (a price accumulation) before seeing another bearish impulse. Regardless of which scenario unfolds, we anticipate that the price will continue to move upwards towards the 1.12000 price level. We will keep you updated on the progress of this chart before any significant price movement occurs.
Note
as initially indicated last week, price has reached the previous high at $1.10 and reversed from there yesterday, we see now a potential opportunity for a short today down to $1.08900 price zone then that bigger up move we talked about aiming for $1.12 price zone. Please feel free to comment about our view vs views. Thanks!
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