The EUR/USD currency pair is one of the most popular and widely traded forex pairs, known for its liquidity and volatility.
This technical outlook takes a deep dive into the factors affecting the EUR/USD price and provides a comprehensive analysis of the pair using technical indicators, high-impact news, and real-life examples.
Whether you're a seasoned forex trader or a newbie, this article will help you understand the intricacies of the EUR/USD pair and optimize your trading strategies.
|EUR/USD pair shows bullish tendencies, but the sustainability of this trend is questionable.|
|Support and resistance levels play a crucial role in determining the future price movement.|
|Support and resistance levels play a crucial role in determining future price movement.|
|High-impact news events can cause volatility and affect the EUR/USD pair.|
|Keep an eye on upcoming economic data releases and geopolitical events to stay informed.|
|Practice proper risk management and trade responsibly to succeed in forex trading.|
The Current State of the EUR/USD Market
A quick glance at the EUR/USD chart shows the bulls in control. However, it's crucial to analyze whether this pressure is sustainable.
In our previous weekly EUR/USD technical analysis, we anticipated the pair to react at the support level of 1.09098.
On Monday, April 17th, the pair hit this level and continued its bullish run. This suggests strong buying at the support or demand zone.
EURUSD Daily Timeframe Analysis
The daily chart reveals that the EUR/USD hit a critical resistance level at 1.10422, which we noted in our last analysis.
With this level still active to resist the price from continuing its bullish run, we must ask ourselves: can the pair break this supply or resistance level?
While the bull is in control, for now, the momentum might be weakening, as evidenced by the MACD histogram.
EURUSD 4-hour Timeframe Analysis
On the 4-hour timeframe, the EUR/USD chart shows sideways movement after hitting the 1.09098 support level.
For now, we can anticipate the price to trade within the range of 1.09098 and 1.10422, barring any significant breakouts.
EUR/USD 1-hour Timeframe Analysis
The 1-hour chart provides us with clear levels to watch. A close look reveals a 1.10090 demand or support level that fails, which should now act as a supply or resistance level.
If the price reaches 1.10090 and rejects it, we can expect the price to break below the uptrend line currently supporting the price. Afterward, the pair could test the main support level of 1.09098 with the intention of breaking out.
A bearish move is more likely, given the weak upward movement and the momentum as seen in the MACD.
Factors Affecting the EUR/USD Price Next Week
Several factors could affect the EUR/USD price next week:
- The support level of 1.0930 is crucial, and any break below it can lead to further bearish momentum.
- The S&P Global Composite PMI in the US is forecasted to increase slightly to 52.8, and if it disappoints, it could affect the USD and revive fears of a recession.
- The ongoing shortage of natural gas in the Eurozone and the threat of high energy prices are driving the euro, with the ECB adopting a more hawkish stance as inflation rises.
- Any major news or geopolitical events, such as trade disputes, can also affect the EUR/USD price.
High-Impact News to Watch for the EUR/USD
Stay informed of the high-impact news that might cause the EUR/USD pair to see volatility in the coming week:
Mon, Apr 24:
- 9:00 am: EUR German Ifo Business Climate (93.4, previous: 93.3)
Tue, Apr 25:
- All Day: EUR Italian Bank Holiday
- 3:00 pm: USD CB Consumer Confidence (104.1, previous: 104.2)
- USD New Home Sales (630K, previous: 640K)
- USD Richmond Manufacturing Index (-9, previous: -5)
Wed, Apr 26:
- 1:30 pm: USD Core Durable Goods Orders m/m (-0.2%, previous: -0.1%)
- USD Durable Goods Orders m/m (0.8%, previous: -1.0%)
Thu, Apr 27:
- 1:30 pm: USD Advance GDP q/q (2.0%, previous: 2.6%)
- USD Unemployment Claims (249K, previous: 245K)
- USD Advance GDP Price Index q/q (3.7%, previous: 3.9%)
- 3:00 pm: USD Pending Home Sales m/m (1.0%, previous: 0.8%)
Fri, Apr 28:
- All Day: EUR German Prelim CPI m/m (0.6%, previous: 0.8%)
- 8:00 am: EUR Spanish Flash CPI y/y (4.1%, previous: 3.3%)
- 1:30 pm: USD Core PCE Price Index m/m (0.3%, previous: 0.3%)
- USD Employment Cost Index q/q (1.1%, previous: 1.0%)
- 2:45 pm: USD Chicago PMI (43.5, previous: 43.8)
- 3:00 pm: USD Revised UoM Consumer Sentiment (63.5, previous: 63.5)
Keeping track of high-impact news events will help you stay ahead of the curve and adjust your trading strategies accordingly.
The EUR/USD currency pair is highly influenced by multiple factors, such as technical analysis, macroeconomic data, and high-impact news events. By staying informed and understanding the various elements that contribute to the pair's movements, traders can make better decisions and optimize their trading strategies.
The EUR/USD pair has shown bullish tendencies, but the sustainability of this trend is questionable. The weakening momentum, as seen in the MACD histogram, suggests that a bearish reversal could be on the horizon. Keep an eye on critical support and resistance levels, as well as high-impact news events, to make informed decisions and navigate the forex market effectively.