Time Zone: GMT +3
Time Frame: 4 Hours (H4)
Fundamental Analysis:
Today, significant volatility may influence the EUR/USD pair due to multiple economic releases. For the USD, traders await crucial CPI (Consumer Price Index) data excluding food and energy from the Bureau of Labor Statistics. Higher-than-expected inflation typically strengthens the USD, leading markets to anticipate tighter monetary policy from the Federal Reserve. Additionally, initial jobless claims and natural gas storage data could further affect USD strength. Conversely, the EUR faces potential volatility from the European Central Bank’s (ECB) upcoming announcements, including the interest rate decision and the subsequent press conference, where any hawkish stance could bolster the Euro.
Price Action:
EUR-USD analysis on the H4 timeframe indicates a bullish trend with current prices encountering significant resistance from a historical zone dating back to early 2023. Recently, price action showed indecision marked by Doji and Pin bar candlesticks, suggesting a potential reversal from current levels. However, the price is presently supported strongly by this historical zone, indicating that if the bullish sentiment prevails, the next logical target is the upper boundary of the existing ascending channel.
Key Technical Indicators:
RSI (28): The Relative Strength Index (RSI) is currently at 51.41, reflecting neutral market conditions. This suggests that the pair has significant room for movement in either direction before reaching overbought or oversold conditions, supporting potential bullish continuation.
MACD (12,26,9): The MACD histogram shows a positive value (0.000223) with the MACD line above the signal line (0.000986), indicating bullish momentum. However, the small magnitude implies caution, as bullish strength may not be very robust.
Stochastic (5,3,3): The Stochastic indicator, with current readings at 40.44 and 37.34, recently experienced a cross under the 20-level, signaling a previous oversold scenario that might lead to renewed bullish interest if momentum continues upward.
Support and Resistance:
Support: Immediate support is noted clearly at 1.15930, aligning with historical significance and recent consolidation.
Resistance: Key resistance stands at 1.18650, coinciding with the upper boundary of the ascending channel and previous swing highs, making it a significant upside target.
Conclusion and Consideration:
EUR/USD on the H4 chart shows ongoing bullish sentiment underpinned by historical support and key technical indicators such as RSI, MACD, and Stochastic. Traders should closely monitor the upcoming US CPI data and ECB’s interest rate decision for potential triggers of significant market moves. Caution is advised due to recent price indecision indicated by Doji and Pin bar formations, suggesting a potential reversal or increased volatility. Always employ proper risk management strategies.
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.
