EUR/USD Daily Chart Analysis

Last week, the EUR/USD pair faced significant resistance around the 1.0790 mark, influenced by various factors signaling potential shifts in the market. This resistance was primarily driven by the convergence of technical indicators, including the 200-day moving average (DMA), a notable downtrend line, and the 50% Fibonacci level. Additionally, hawkish comments from Federal Reserve speakers led to fluctuations in Bund-Treasury (Bund-Tsy) yield spreads, highlighting the market’s sensitivity to central bank communication. As investors grapple with recent weak economic data from the US, anticipation builds for upcoming reports such as the US Consumer Price Index (CPI) and retail sales figures, set to be released on May 15. These data releases are expected to impact market sentiment and potentially trigger changes in currency valuations. Furthermore, with expectations of rate cuts from the European Central Bank (ECB) in June, and possibly more throughout the year, further dynamics are anticipated in the EUR/USD pair. In case of dovish US data releases, the pair might encounter resistance at 1.0835, while key support levels are expected to be around the recent lows near 1.0724, serving as crucial indicators amidst evolving macroeconomic conditions.

The recent resistance encountered by the EUR/USD pair at 1.0790 highlights the importance of technical analysis in understanding currency movements. The convergence of the 200-DMA, downtrend line, and 50% Fibonacci level acted as significant barriers, shaping trader sentiment and influencing price action. Additionally, the impact of Federal Reserve statements on Bund-Tsy yield spreads underscores the interconnected nature of global financial markets and the role of central bank communication in shaping currency valuations. As the market awaits key US economic data releases, such as the CPI and retail sales figures, significant fluctuations in the EUR/USD pair are anticipated. The expected rate cuts by the ECB add further complexity to the currency landscape, potentially impacting investor sentiment and risk appetite. Amidst these developments, technical levels such as the 1.0835 resistance and 1.0724 support are crucial reference points for traders navigating the evolving market conditions. With the macroeconomic outlook continuously evolving, adaptability and vigilance remain essential for participants in the currency markets to respond effectively to emerging trends and changing dynamics.