Technical Analysis

EUR/USD Price Analysis – June 17, 2024

By LonghornFX Technical Analysis
Jun 17, 20242 min

Daily Price Outlook

The EUR/USD pair slipped to 1.0670 on Friday before recovering to 1.0700, as political tensions in Europe and disappointing US economic data fueled uncertainty. The recent shift towards right-wing parties in European elections, coupled with a snap election in France, has raised concerns about the region's stability and weighed on the euro.

US Economic Data Disappoints:

In the US, the University of Michigan's Consumer Sentiment Index fell to a six-month low of 65.6 in June, missing expectations of 72.0. Additionally, 5-year inflation expectations rose to 3.1%, indicating persistent price pressures and raising doubts about the Federal Reserve's ability to tame inflation.

Diverging Fed and Market Expectations:

The Fed's latest Summary of Economic Projections (SEP) revealed a more hawkish stance than the market anticipated, with only one rate cut projected for 2024. However, rate markets continue to price in a September rate cut, highlighting a disconnect between the Fed's outlook and market sentiment.

Upcoming Events:

Investors will closely monitor the upcoming G7 meetings and the release of the Empire State Manufacturing Index on Monday for further insights into the global economic landscape and its potential impact on the EUR/USD pair.

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

EUR/USD - Technical Analysis

The EUR/USD pair is struggling to maintain upward momentum, trading slightly below the 1.07 mark. The 4-hour chart reveals the pair is hovering just beneath its pivot point at $1.0726, signaling potential bearish pressure.

The 50-day Exponential Moving Average (EMA) at $1.0802 further reinforces this bearish outlook, acting as a significant resistance level.

The Relative Strength Index (RSI) reading of 34 indicates oversold conditions, hinting at a potential bounce in the near term.

However, traders should remain cautious as the overall trend remains bearish. Key resistance levels to watch include $1.0771, $1.0808, and $1.0847. A break above these levels could negate the bearish outlook and signal a potential reversal.

On the downside, immediate support lies at $1.0674, followed by $1.0650 and $1.0613.

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