Technical Analysis

EUR/USD Price Analysis – May 31, 2024

By LonghornFX Technical Analysis
May 31, 20243 min

Daily Price Outlook

During the European trading session, the EUR/USD currency pair has experienced a bullish trend, with the Euro gaining strength against the US Dollar. However, the reason behind this upward movement is the hotter-than-expected inflation data from the Eurozone. The Eurozone's annual headline and core Harmonized Index of Consumer Prices (HICP) rose strongly by 2.6% and 2.9%, respectively, in May. This exceeded market expectations and signals robust economic performance in the Eurozone, bolstering the Euro against the Dollar. Traders will continue to closely monitor economic indicators from both regions to gauge the future direction of the currency pair.

Eurozone Inflation Data Boosts EUR/USD Pair

On the EUR front, the previously released strong inflation data from the Eurozone has had a significant impact on the EUR/USD pair. The higher-than-expected inflation numbers indicate that the European Central Bank (ECB) may adopt a more gradual approach to rate cuts, which is positive for the Euro. The EUR/USD pair jumped to 1.0800 in Friday's European session following the release of the inflation data, showing the market's reaction to this positive news for the Eurozone economy.

Bearish US Dollar and Downbeat US Economic Data Weigh on EUR/USD Pair

On the other hand, the US dollar has been facing bearish pressure, partly due to downbeat economic data from the United States. The US core Personal Consumption Expenditure Price Index (PCE), which is the Federal Reserve's preferred inflation gauge, is projected to have grown steadily by 0.3% and 2.8% on a monthly and annual basis, respectively. However, any soft figures in the data could lead to traders increasing their bets on Fed rate cuts, which could further weaken the US Dollar against the Euro.

Moreover, recent US economic data, including slower Q1 Gross Domestic Product (GDP) growth of 1.3%, against the initial estimate of 1.6%, has also weighed on the US Dollar. This indicates a slower-than-expected economic expansion in the US, which could further dampen the Dollar's performance against the Euro.

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

EUR/USD - Technical Analysis

The EUR/USD pair is currently priced at $1.08291, down 0.13%, indicating a modest decline in market sentiment. The pivot point for today’s session is at $1.0843.

Immediate resistance levels are identified at $1.0877, $1.0895, and $1.0914. On the downside, immediate support is found at $1.0788, followed by $1.0761 and $1.0736.

The 50-day Exponential Moving Average (EMA) is currently at $1.0841, suggesting a potential resistance level very close to the current price. The Relative Strength Index (RSI) stands at 47, indicating that the market is in a neutral to slightly bearish territory.

For traders looking to capitalize on the current market conditions, an entry price is recommended below $1.08418, with a take profit target set at $1.08009. A stop loss should be placed at $1.08624 to manage risk effectively.

In conclusion, the EUR/USD is experiencing slight downward pressure, with technical indicators suggesting a cautious outlook.

Related News

- GOLD Price Analysis – May 31, 2024

- S&P 500 Price Analysis – May 31, 2024

- EUR/USD Price Analysis – May 29, 2024



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