FUNDAMENTAL OVERVIEW
USD:
The US dollar continues to bounce around potentially due to some uncertainty around tariffs after the US Supreme Court ruled against the previous levies. It’s pretty clear at this point that tariffs are here to stay as Trump reimposed them using different laws. Overall, not much has changed.
The price action remains mostly rangebound as traders await new catalysts and further developments to pick a direction.
The real risks remain a potential US-Iran military escalation which could boost the greenback on severe risk-off mood or a hawkish repricing on stronger US data which would have a positive effect on the USD. Fed’s Waller placed a great deal on next week’s NFP report.
EUR:
On the EUR side, nothing has changed. As a reminder, the ECB held interest rates steady as widely expected at the last meeting and kept the same data-dependent and meeting-by-meeting guidance. The policymakers have eased the rhetoric on the euro recently after the currency dropped below the 1.20 level against the dollar.
The focus remains on inflation as the central bank has repeatedly stated that it won’t respond to small or short-term deviations from the 2% target. The data for now has been positive with economic activity picking up and core inflation hovering just a bit above target.
EURUSD TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that EURUSD is consolidating around the 1.18 handle as traders await new catalysts to pick a direction. From a risk management perspective, the sellers will have a better risk to reward setup around the 1.1927 level to position for a drop into the 1.16 handle next. The buyers, on the other hand, will want to see the price breaking above that level to open the door for a rally into new cycle highs.
EURUSD TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can see more clearly the rangebound price action between a few support and resistance zones. The buyers will likely step in around the 1.1807 support with a defined risk below it to extend the rally into the 1.1850 resistance. The sellers, on the other hand, will look for a break lower to pile in for a drop into the 1.1750 support next.
EURUSD TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s not much else we can add here as the buyers will look for a bounce around the support, while the sellers will look for a break lower. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today we have the third round of US-Iran nuclear talks and the latest US Jobless Claims figures. Tomorrow, we conclude the week with the German CPI and the US PPI data.
