The US Dollar weakened last Friday due to a soft US NFP report that showed a cooling labor market. This led to an increase in the unemployment rate and a decrease in wage growth. Despite the slowdown, the economy is still growing, which the market seems to view positively as it anticipates a soft landing.
The Euro gained against the US Dollar last week, driven by a risk-on sentiment. The US data supported the expectation of at least two rate cuts from the Fed but did not signal a recession. On the monetary policy front, ECB members have stated they will wait for summer data before deciding on a rate cut in September.
EURUSD Technical Analysis – Daily Timeframe
On the daily chart, EURUSD extended its rally above the 1.08 handle and is now eyeing the resistance around the 1.0885 level. Sellers may step in at this level to push the price back towards the 1.0812 support, while buyers will aim for a break higher towards the 1.10 handle.
EURUSD Technical Analysis – 4 hour Timeframe
Looking at the 4-hour chart, buyers may find a better risk to reward setup around the 1.0812 support, where a trendline also provides confluence. Sellers, on the other hand, will look for a break lower to turn the bias bearish and target the 1.0727 level next.
EURUSD Technical Analysis – 1 hour Timeframe
On the 1-hour chart, recent price action shows a bounce at the 1.0812 level and a continuation of the uptrend. With the US CPI and Jobless Claims figures due today, we could see a spike towards the 1.0885 resistance or the trendline. The red lines indicate the average daily range for today.
Upcoming Catalysts
Today’s focus is on the US CPI and Jobless Claims figures, which are significant market movers. Tomorrow, the week concludes with the US PPI and the University of Michigan Consumer Sentiment survey. These reports will provide further insights into the health of the US economy and potentially impact the EURUSD pair.