Time Zone: GMT +3
Time Frame: 4 Hours (H4)
Fundamental Analysis:
EUR/USD is expected to experience increased volatility today, influenced by significant economic events. Key speeches from Federal Reserve members, including New York Fed President John Williams and St. Louis Fed President Alberto Musalem, could indicate future monetary policy stances, directly impacting the USD. Furthermore, market participants will closely watch the University of Michigan’s inflation expectations, consumer sentiment reports, and the US Producer Price Index (PPI). Meanwhile, Eurozone traders will evaluate Germany’s CPI data and anticipate updates from the Eurogroup meetings. These factors will likely play significant roles in shaping EUR/USD price movements today.
Price Action:
The EUR USD H4 price action clearly indicates a bullish breakout. The pair recently broke through the critical daily resistance line and retested it, confirming it as new support. Subsequently, EUR-USD breached the next resistance zone with three solid bullish candles, now serving as immediate support. However, the emergence of a doji and subsequent red candle suggests potential short-term bearish corrections, with the primary target likely the recently established support zone around 1.1110.
Key Technical Indicators:
Bollinger Bands: EUR/USD is trading above the upper Bollinger Band, signifying overextension and potential correction or consolidation in the near term. Traders should remain cautious about possible reversals or sideways movement.
Parabolic SAR: The Parabolic SAR dots remain below the current price, indicating ongoing bullish momentum in the EURUSD pair. However, traders should watch for potential reversal signs if SAR dots shift above the price.
RSI (Relative Strength Index): RSI currently stands at 66.98, approaching the overbought level (70). While this supports bullish momentum, the nearing overbought conditions suggest potential for a corrective move soon.
MACD (Moving Average Convergence Divergence): MACD demonstrates increasing bullish momentum, with the histogram bars expanding above the zero line. This indicates strong buyer presence, yet traders must remain cautious for any bearish divergence forming.
Awesome Oscillator: The Awesome Oscillator indicates bullish strength, as evidenced by growing green bars above the zero line. This supports the bullish scenario but, like other indicators, advises caution for any impending correction.
Support and Resistance:
Support: Immediate support is located at the recently broken resistance turned support zone around 1.1110, followed by the significant daily level at 1.1094.
Resistance: Current resistance stands at recent highs near 1.1200, with the psychological level of 1.1250 as the next major barrier.
Conclusion and Consideration:
The EURUSD pair remains bullish on the H4 chart, supported by multiple technical indicators including Bollinger Bands, MACD, RSI, Parabolic SAR, and the Awesome Oscillator. However, given the current overextended conditions and fundamental factors, traders should prepare for potential corrections toward the immediate support zone at 1.1110. Significant economic announcements and Fed member speeches scheduled for today could lead to heightened volatility, thereby warranting careful risk management.
Disclaimer: The analysis provided for EUR/USD is for informational purposes only and does not constitute investment advice. Traders are encouraged to perform their own analysis and research before making any trading decisions on EURUSD. Market conditions can change quickly, so staying informed with the latest data is essential.
