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EUR/USD Outlook Amid Inflation Data and ECB Comments


Heading into a pivotal week with a slew of economic data releases, the EUR/USD pair is cautiously advancing. The pair is seen flirting with the 1.0950 resistance, building on the previous week's upward momentum.

 EUR/USD currency pair, A financial chart depicting the with technical indicators including candlesticks, Bollinger Bands, Ichimoku Cloud, and volume bars. The chart also features an RSI indicator below, signalling recent market volatility.

Eurozone Economic Health in Focus Investors are bracing for the Eurozone inflation data due mid-week, which could offer insights into the European Central Bank's (ECB) rate decision pathway. Prior to this, ECB President Christine Lagarde's speech today holds significant weight, especially after her recent firm stance on the ongoing battle with inflation.


ECB's Stance on Inflation and Rates The upcoming inflation readings are crucial, particularly if they come in above expectations, potentially leading investors to reassess the likelihood of ECB rate reductions, potentially pushing such expectations into the second half of 2024.


US Dollar Positioning Conversely, the US dollar is finding itself at a two-and-a-half-month nadir, with market sentiment leaning towards an eventual rate cut by the Federal Reserve. Today's focus will also shift to the US home sales data, expected to rise by 4%, which may influence dollar dynamics.


Technical Takeaway From a technical perspective, the EUR/USD needs to convincingly break above the immediate resistance at 1.0950 to pave the way for a test of the 1.10 psychological level. The currency pair's direction will also hinge on the tone set by central bank leaders and key economic indicators.


Today's intraday signal


Pair: EURUSD


Trade Direction: BULLISH


The EURUSD is exhibiting a BULLISH pattern with price movements hovering around the pivot point and showing a tendency to move towards the first resistance level.


Trade Probability: 70%


There's a strong probability for a bullish move given the price's proximity to the pivot point and the positive trend indicated by the technical analysis.


Friday's Trend: The trend for the previous day showed bullish momentum, supporting the current upward bias.


Pivot Point Analysis:


  • Pivot Point: 1.094

  • 1st Resistance: 1.099

  • 1st Support: 1.090

Indicators:

  • Volatility: There's a moderate level of market volatility with some expansion in the Bollinger Bands.

  • Moving Average (MA): The currency pair is trading near the Moving Average, hinting at a potential bullish crossover.

  • Ichimoku: Price action is above the Ichimoku cloud, which is a bullish signal.

  • RSI: The RSI is ascending towards the 70 level but not yet overbought, suggesting room for upward movement.

  • Bollinger Bands: The pair is trading near the upper band, indicating bullish pressure.

🎯 Targets for Taking Profits:


  • Buy: (If BULLISH)

  • 1st Target (R1): 1.099

  • 2nd Target (R2): 1.103

  • 3rd Target (R3): 1.108


❌ Stop Loss Guidelines:


  • Buy: Position the stop loss slightly below the 1st Support at 1.090 to limit potential losses.

Suggestion: A long position is recommended based on the bullish indicators, aiming for the first resistance as an initial profit target. Observe the price behavior at each resistance level for potential exits or to adjust the stop loss accordingly.


The EUR/USD:


The pair's trajectory remains intertwined with policy cues and inflation data from both sides of the Atlantic. With the ECB maintaining a firm anti-inflationary stance and the US potentially shifting gears on rates, traders will be watching closely for opportunities as the narratives unfold.



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