Technical Analysis

EUR/USD Price Analysis – April 08, 2024

By LonghornFX Technical Analysis
Apr 8, 20243 min

Daily Price Outlook

Despite the upbeat German industrial figures indicating positive expansion in February, the EUR/USD currency pair failed to halt its bearish performance and remained well offered around the 1.0830 level. However, the reason behind this downward trend can be attributed to the bullish US Dollar (USD). Additionally, rising expectations for a potential interest rate cut by the European Central Bank (ECB) further weigh on the Euro, contributing to the bearish sentiment surrounding the EUR/USD pair. In contrast, the upbeat German industrial figures were seen as one of the key factors that helped the EUR/USD currency pair to limit its deeper losses.

Impact of Upbeat US Monthly Employment Data on EUR/USD

On the US front, the recent release of upbeat US monthly employment data, particularly the Nonfarm Payrolls (NFP) report showing a significant addition of 303K jobs in March, has bolstered the US Dollar. This positive economic indicator has led investors to lower their expectations for an eventual interest rate cut by the Federal Reserve (Fed). As a result, the USD has maintained its upward trend, exerting downward pressure on the EUR/USD currency pair.

Positive Risk Tone and its Impact on EUR/USD

Apart from this, the generally positive tone in global equity markets, supported by easing geopolitical tensions and improving economic outlooks, may cap the safe-haven appeal of the US Dollar, which may help the EUR/USD currency pair to limit its deeper losses. However, the bearish sentiment surrounding the Eurozone economy, coupled with expectations for ECB rate cuts, keeps the EUR/USD pair under pressure, limiting its ability to benefit from a positive risk tone in the market.

Impact of Upbeat German Industrial Figures on EUR/USD

On the other side, the upbeat German industrial figures, indicating a 2.1% month-on-month increase in industrial output in February, failed to have a positive impact on the EURUSD pair. Despite the positive data from Germany, the EUR/USD pair remains bearish around 1.0830. However, this poor performance can be attributed to ongoing concerns regarding the Eurozone economy as well as the expectations for ECB policy decisions.

EUR/USD Price Chart - Source: Tradingview
EUR/USD Price Chart - Source: Tradingview

EUR/USD - Technical Analysis

The Euro (EUR/USD) displayed minor retracement, recording a slight decline to 1.08353, a reduction of 0.02%. Positioned just above the pivot point of 1.0814, the currency pair shows a tight trading range, suggesting a cautious market sentiment.

Immediate resistance is identified at 1.0903, with further hurdles at 1.0966 and 1.1056, which are critical levels that the Euro must surpass to establish a stronger upward trend. Conversely, the support framework is set at 1.0748, with additional buffers at 1.0664 and 1.0595, marking potential areas for buying interest to emerge.

Technical indicators like the Relative Strength Index (RSI) standing at 62 and the 50-day Exponential Moving Average (EMA) at 1.0832 reinforce a potential bullish bias, indicating that the market could lean towards buying. The close alignment of the current price with the 50 EMA underscores the market's balanced state.

In summary, EUR/USD is teetering on the brink of a bullish breakout, needing to clear the immediate resistance to confirm upward momentum.

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