FUNDAMENTAL
\nOVERVIEW<\/p>\n
USD:<\/p>\n
The US dollar strengthened across
\nthe board on safe haven demand this week after the US-Iran conflict erupted
\nover the weekend. The main driver though was the market\u2019s realisation that rate
\ncuts might not come as soon as expected. <\/p>\n
In fact, higher oil prices
\nwill eventually put upward pressure on inflation and the US data this week
\nclearly showed that the economy has been re-accelerating since the start of the
\nyear and not slowing down further. <\/p>\n
Traders pared back their
\nrate cut bets this week with the total easing by year-end now seen around 36
\nbps vs 58 bps on Friday. Today, we have the US NFP report and all the jobs data
\nwe got up until now suggests that we will likely get good data. <\/p>\n
EUR:<\/p>\n
On the EUR side, the
\nUS-Iran conflict led to a surge in energy prices which are feeding into higher
\ninflation expectations. This led the market to price in a rate hike from the ECB
\nthis year. ECB policymakers are cautioning against reacting too fast to Middle
\nEast events as they could end up being transitory like in the past. <\/p>\n
This conflict is already
\nmuch longer than those we experienced in the past few years. Trump mentioned
\nthat it could last 4 weeks and, although initially it looked like one of his
\nusual exaggerations, the risk is that he\u2019s really considering going on for such
\na long time. This is likely to weigh on growth and a rate hike would make
\nthings even worse.<\/p>\n
EURUSD TECHNICAL
\nANALYSIS \u2013 DAILY TIMEFRAME<\/p>\n
EURUSD – daily<\/p>\n
On the daily chart, we can EURUSD TECHNICAL EURUSD – 4 hour<\/p>\n On the 4 hour chart, there\u2019s EURUSD TECHNICAL ANALYSIS \u2013 EURUSD – 1 hour<\/p>\n On the 1 hour chart, we can see more clearly the rangebound price action at UPCOMING CATALYSTS<\/p>\n
\nsee that EURUSD<\/a> stalled at the key 1.1575
\nlevel. This is where the buyers are stepping in with a defined risk below the
\nswing level to position for a rally into the downward trendline. The sellers,
\non the other hand, will look for breaks to increase the bearish bets into the
\n1.14 handle next.<\/p>\n
\nANALYSIS \u2013 4 HOUR TIMEFRAME<\/p>\n
\nnot much we can add here as the pair got stuck in a consolidation at the 1.1575
\nlevel. If the price bounces and breaks above the 1.1655 high, we can expect the
\nbuyers to increase the bullish bets into the trendline. <\/p>\n
\n1 HOUR TIMEFRAME<\/p>\n
\nthe 1.1575 level as traders await new catalysts to push the price below the key
\nlevel. We have the NFP report today which might boost the USD further on strong
\ndata. The red lines define the average daily range<\/a> for today. <\/p>\n