EURUSD Technical Analysis – The focus switches to the US PMIs

Fundamental Overview

The US Dollar this week has been erasing some of the losses experienced last week after the benign US PPI and the Trump’s reciprocal tariffs announcement. There hasn’t been any notable catalyst this week to support the greenback although some analysts pointed to less dovish comments from Fed’s Waller on Tuesday which would explain the rise in Treasury yields afterwards.

Yesterday, during the Asian session we got some positive headlines on the tariffs side as Trump said that a new trade deal with China was possible. That weakened the US Dollar which continued to depreciate throughout the European and US sessions.

On the EUR side, today we got the Eurozone PMIs today which showed steady growth with another pick up in the manufacturing index, which is more sensitive to the business cycles. Earlier in the session, we got a poor reading from France which weighed on the euro as the market pricing for the ECB increased to 80 bps of easing by year-end.

Those expectations eased after better data from Germany PMIs and Eurozone PMIs though. The baseline expectation remains for three more rate cuts.

EURUSD Technical Analysis – Daily Timeframe

On the daily chart, we can see that the EURUSD is trading between the 1.0532 resistance and the 1.0450 support. The buyers will likely step in around the support to position for a rally into the 1.06 handle. The sellers, on the other hand, will look for a break below the support to increase the bearish bets into the 1.0380 level next.

EURUSD Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have an upward trendline defining the bullish momentum. If we get a pullback into the trendline, we can expect the buyers to lean on it with a defined risk below it to position for a rally into the 1.06 handle. The sellers, on the other hand, will look for a break lower to increase the bearish bets into new lows.

EURUSD Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have a minor upward trendline defining the bullish momentum on this timeframe. On an intraday basis, we can expect the buyers to lean on the trendline to position for a rally into the 1.06 handle, while the sellers will look for a break lower to extend the pullback into the 1.0445 level next. The red lines define the average daily range for today.

Upcoming Catalysts

Today we conclude the week with the US Flash PMIs.