Technical Analysis

EUR/USD Price Analysis – Jan 10, 2024

By LonghornFX Technical Analysis
Jan 10, 20244 min

Daily Price Outlook 

Despite the disappointing German data, the EUR/USD currency pair maintained its upward trend and remained well bid around the $1.0948 level. The reason for this upward trend can be attributed to the anticipated rise in Eurozone inflation last month, which might give the European Central Bank (ECB) room to maintain high-interest rates for a while.

Moving on, traders seem cautious to place any strong position ahead of the release of the latest consumer inflation figures from the United States (US) on Thursday, seeking meaningful directional impetus.

Fed's Approach, Jobs Report, and Dollar Strength Impact EUR/USD Pair

It's important to mention that a recent report from the New York Fed revealed a drop in US consumers' expectations of short-term inflation, hitting a three-year low in December. This supports predictions of a possible change in the Federal Reserve's approach, causing hesitation among US Dollar supporters and giving a boost to the EUR/USD pair.

However, the positive US monthly jobs report released last Friday suggests a resilient job market, allowing the Fed to maintain higher interest rates for a more extended period.

Additionally, comments from some Fed officials hint at a less lenient policy, supporting higher US Treasury bond yields, strengthening the dollar, and putting pressure on the EUR/USD pair.

Therefore, the drop in US inflation expectations supports a shift in the Federal Reserve's approach, boosting the EUR/USD pair. However, a resilient job market and hints of a less lenient policy strengthen the dollar, putting pressure on the EUR/USD pair.

German Industrial Data and ECB Rate Cut Concerns Impact EUR/USD Pair

Furthermore, the Euro is facing more pressure due to disappointing German data released on Tuesday, revealing a 0.7% drop in Industrial Production for November, worse than the expected 0.3% increase.

This heightens concerns about a possible recession in the largest European economy, increasing bets on a 25 basis points rate cut by the European Central Bank (ECB) in April and contributing to the negative sentiment around the EUR/USD pair.

However, an anticipated rise in Eurozone inflation last month might give the ECB room to maintain high-interest rates for a while. This suggests a need for caution among bearish traders as they await potential moves in the absence of significant US data on Wednesday.

Therefore, the disappointing German industrial data raises concerns about a recession, adding pressure on the EUR/USD pair. Expectations of an ECB rate cut contribute to negative sentiment, but a potential rise in Eurozone inflation offers some caution for bearish traders.

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

EUR/USD - Technical Analysis

Analyzing key price levels, the pivot point for EUR/USD stands at 1.0866. The pair faces immediate resistance at 1.0956, with further ceilings at 1.1034 and 1.1122. These levels are crucial in mapping out the Euro's potential upward journey. Conversely, immediate support is identified at 1.0788, followed by 1.0698 and 1.0607, which are vital to cushion any downward pressures.

Technical indicators provide deeper insights into the pair's market sentiment. The Relative Strength Index (RSI) is at 42, leaning towards a bearish outlook as it sits below the neutral 50 threshold. The Moving Average Convergence Divergence (MACD) shows a figure of 0.00030 with a signal line at -0.00082, indicating potential for either direction but with a slight bearish inclination.

Chart analysis shows an upward trendline supporting EUR/USD at the 1.0875 mark, while a double top pattern presents resistance around $1.096. These chart patterns suggest a tussle between bullish and bearish sentiments, with the pair caught in a tight trading range.

In conclusion, the EUR/USD pair shows a neutral to bearish trend in the short term. Traders might consider a sell strategy below 1.09692, targeting a take profit at 1.08777 and placing a stop loss at 1.10179. This approach is based on the current technical indicators and chart patterns, which suggest a cautious approach with the potential for a slight downward correction.

Related News

- GBP/USD Price Analysis – Jan 10, 2024

- GOLD Price Analysis – Jan 10, 2024

- EUR/USD Price Analysis – Jan 08, 2024



24/7 live support, lightning fast withdrawals, guaranteed safe and reliable trading platforms with a true ECN broker.