EUR/USD Fundamental Analysis
The EUR/USD trading pair has recovered from its early losses during Asian and European trading sessions today. However, market participants are unwilling to bet against the US Dollar until Tuesday, February 14, when the US will release impactful inflation data.
Although most Fed governors and US officials seem to be on the Fed’s side, there is still a dilemma for decision-makers. Moreover, Patrick Harker, the president of the Philadelphia Federal Reserve, said that while a rate drop is unlikely this year, it would be possible in 2024 if inflation starts to decline.
Eurogroup Meeting in Progress
However, dovish remarks from European Central Bank (ECB) officials contrast with positive statements from Fed policymakers, giving the EUR/USD traders reason for optimism.
Moreover, Christine Lagarde, the head of the ECB, and Fabio Panetta, a policymaker, will participate in today’s Eurogroup meeting in Brussels. The meeting’s topic will be the labor markets in the EU, which have remained resilient despite a challenging external environment. Ministers will also discuss long-term challenges related to demography, the green transition, rising inflation, and wage development in the labor market. They will end the Eurogroup meeting with macroeconomic and financial events and forecasts.
Michelle Bowman, the governor of the Federal Reserve, is scheduled to appear at a gathering of the American Bankers Association later in the day.
The preliminary report of Michigan’s Consumer Sentiment Survey for February last week, on February 10, helped the US Dollar hold onto its strength compared to its rivals ahead of the weekend and pushed EUR/USD to close the week in the red. However, the upcoming key growth and inflation reports from the US and the Eurozone will impact the market risk sentiment.
The cautious sentiment in front of major economic data might weaken the EUR/USD. The pair is trading at $1.0676, up 0.01% in the last 24 hours.
EUR/USD Technical Analysis
The forex pair EUR/USD’s technical outlook for the H2 chart suggests that there might be a trend reversal in the coming hours. The appearance of Tweezer Bottom Candles is enough to confirm the signal. Furthermore, the Stochastic Oscillator with a signal line showing an upward wing also backs the signal. However, the value of the Relative Strength Index (RSI) is lower than the mid-level 50, showing market indecision right now.
If the price continues to increase, the first resistance might be at 1.07103. it is the same point where the 50-Day Simple Moving Average line is touching the Trendline. The next resistance could be a little higher at 1.07647.
On the bearish scenario, if the currency pair EUR/USD fails to move past the 20-Day SMA line and above the 1.07093 level, there are chances that it might continue its bearish trend. The first support could be seen at 1.06386.
Daily Technical Levels:
Pivot Point: 1.0680