![](https://blog.trive.co.za/wp-content/uploads/2024/02/inv-1024-x-512-px-46.png)
As the new week unfolds, the EURUSD currency pair encounters early pressure as the US Dollar advances in anticipation of a week brimming with significant events. Thursday’s unveiling of the US PCE data, a pivotal gauge of inflation for the Federal Reserve, assumes centre stage. Adding to the intrigue, Friday unveils inflation figures from the Eurozone, setting the stage for a potentially volatile week’s end.
Amidst these headline events, scrutiny extends to the preceding days, featuring insights from over 10 Fed speakers. Their commentary can potentially reshape market expectations regarding the timing of the central bank’s first rate cut. Presently, markets are inclined toward a rate reduction post-June, with a 68% likelihood of rates being lower by at least 25bps following the June meeting, as per the CME FedWatch Tool. Yet, the forthcoming week may pivot this sentiment as fresh data emerges.
Technical
On the daily chart, there has been a breakout from the descending channel formation, with the currency pair pushing through the 25-SMA (green line), which has crossed above the 100-SMA (orange line) in a signal of short-term bullish dominance. These SMAs underpin the currency pair’s price action and could provide the support needed to achieve a sustainable bullish trend reversal if the price can push through resistance at 1.0841.
If the resistance at 1.0841 gets cleared, the pair looks poised to reach the 50-SMA (blue line) at the psychological resistance of 1.0886, where the initial run was halted. The Fibonacci midpoint at 1.0917 becomes a level of interest, with the 61.8% Fibonacci golden ratio at 1.0969 established as another crucial level of resistance that could trigger a reversal.
However, if resistance at 1.0841 holds in the upcoming session, the price action could be unsustainable above the dynamic resistance of the prior channel. Support at 1.0786 could be the determining level, as an additional leg below this support could confirm the return of bearish momentum, which could drive the price toward 1.0741 in the upcoming sessions to return to the prior descending channel.
![](https://blog.trive.co.za/wp-content/uploads/2024/02/image-120.png)
Summary
The EURUSD currency pair has given back some of its recent gains as the greenback returned to strength following the latest hawkish comments from Federal Reserve officials. The upcoming week is headlined by multiple inflation releases, which could alter the price’s trajectory in a potentially volatile close to the week.
Sources: Koyfin, Tradingview, Reuters
Piece written by Tiaan van Aswegen, Trive Financial Market Analyst
Disclaimer: Trive South Africa (Pty) Ltd (hereinafter referred to as “Trive SA”), with registration number 2005/011130/07, is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act, 37 of 2002. Trive SA is authorised and regulated by the South African Financial Sector Conduct Authority (FSCA) and holds FSP number 27231. Trive Financial Services Ltd (hereinafter referred to as “Trive MU”) holds an Investment Dealer (Full-Service Dealer, excluding Underwriting) Licence with licence number GB21026295 pursuant to section 29 of the Securities Act 2005, Rule 4 of the Securities Rules 2007, and the Financial Services Rules 2008. Trive MU is authorized and regulated by the Mauritius Financial Services Commission (FSC) and holds Global Business Licence number GB21026295 under Section 72(6) of the Financial Services Act. Trive SA and Trive MU are collectively known and referred to as “Trive Africa”.
Market and economic conditions are subject to sudden change which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. Trive Africa and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered. Please consider the risks involved before you trade or invest. All trades on the Trive Africa platform are subject to the legal terms and conditions to which you agree to be bound. Brand Logos are owned by the respective companies and not by Trive Africa. The use of a company’s brand logo does not represent an endorsement of Trive Africa by the company, nor an endorsement of the company by Trive Africa, nor does it necessarily imply any contractual relationship. Images are for illustrative purposes only and past performance is not necessarily an indication of future performance. No services are offered to stateless persons, persons under the age of 18 years, persons and/or residents of sanctioned countries or any other jurisdiction where the distribution of leveraged instruments is prohibited, and citizens of any state or country where it may be against the law of that country to trade with a South African and/or Mauritius based company and/or where the services are not made available by Trive Africa to hold an account with us. In any case, above all, it is your responsibility to avoid contravening any legislation in the country from where you are at the time.
CFDs and other margin products are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. See our full Risk Disclosure and Terms of Business for further details. Some or all of the services and products are not offered to citizens or residents of certain jurisdictions where international sanctions or local regulatory requirements restrict or prohibit them.