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Fundamental
Overview
Yesterday, the US
PPI report missed expectations by a big margin triggering a selloff in the
US Dollar as the market started to position into a potentially soft US CPI release
today.
For the Fed, the market is
split between a 25 and 50 bps cut in September and a total of 107 bps of easing
by year-end. On the ECB side, the market is expecting a 25 bps cut in September
and a total of 70 bps of easing by year-end.
EURUSD Technical
Analysis – Daily Timeframe
EURUSD Daily
On the daily chart, we can
see that EURUSD is breaking above the 1.10 handle as the soft US PPI yesterday prompted
the market to position for a soft CPI today. The natural target for the buyers
should be the 1.1136 high as there’s no notable resistance
until then. The sellers, on the other hand, will want to see the price falling
back below the 1.10 handle to position for a drop into the 1.09 handle.
EURUSD Technical
Analysis – 4 hour Timeframe
EURUSD 4 hour
On the 4 hour chart, we can
see that the price recently pulled back into the 1.09 handle where we had the
50% Fibonacci retracement level for confluence and bounced as the buyers piled in
with a defined risk below the level to position for new highs. If the sellers
take back control with a drop below the 1.10 handle, the 1.09 support will be a
key zone to break to extend the fall into the 1.0812 level next.
EURUSD Technical
Analysis – 1 hour Timeframe
EURUSD 1 hour
On the 1 hour chart, we can
see that the price yesterday broke above the resistance zone around the 1.0940
level following the soft US PPI report and extended the rally as the bullish
momentum picked up. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we have the US CPI report. Tomorrow, we get the US Retail Sales and
Jobless Claims figures. Finally, on Friday, we conclude the week with the
University of Michigan Consumer Sentiment survey.