On the daily EURUSD chart below, we can see that the market continued to charge higher as the USD remains weak due to the market pricing the end of the hiking cycle at the next FOMC meeting. The ECB, on the other hand, looks more determined to keep hiking as core inflation in the eurozone continues to climb.

The ECB had also the courage to surprise with a 50 bps hike at its last meeting despite the banking troubles, which is the opposite of what the Fed did as they delivered a dovish 25 bps hike.

So, at the moment the US Dollar is suffering from the interest rates trade and seems that only very weak economic data can lift it as the market would switch from the rates trade to the recession trade.

EURUSD Technical Analysis

On the 4 hour chart below, we can see some consolidation going on over the past few weeks. This is a sign that there’s still lots of uncertainty in the market. The price keeps making higher lows though and the resistance at the 1.0931 seems to be the target for a breakout.

The buyers will pile in if the price breaks above the resistance and target the next resistance at 1.1033. The sellers, on the other hand, are likely to step in at the 1.0931 resistance with defined risk and target the break below the 1.0759 support.

On the 1 hour chart below, we can see that in such choppy environments it’s hard for traders to pick a side and stick with it as the volatility is high. There’s another likely spot where the buyers can step in in case we get a pullback, and that is at the 38.2% Fibonacci retracement level. The sellers though will be waiting for a break below the fib level to pile in even more aggressively.

EURUSD Technical Analysis