Technical Analysis

EUR/USD Price Analysis – April 19, 2024

By LonghornFX Technical Analysis
Apr 19, 20243 min

Daily Price Outlook

The EUR/USD currency pair has been unable to halt its downward rally and has remained under pressure around the 1.0640 level. This downward trend can be attributed to escalating geopolitical tensions, which have strengthened the safe-haven US dollar and led to losses in the EUR/USD currency pair. Additionally, the EUR/USD pair's decline was exacerbated by the Fed's hawkish stance, which bolstered the US dollar further.

Geopolitical Tensions Trigger Demand for Safe-Haven Assets, Weigh on EUR/USD Pair

On the geopolitical front, Israel's reported launch of drones at Iran in retaliation for the April 13 attack has heightened geopolitical uncertainties. This has led to increased demand for safe-haven assets, such as the US dollar. Consequently, the EUR/USD pair faced selling pressure as investors sought refuge in the USD, causing a decline in its value.

Federal Reserve's Hawkish Stance Boosts US Dollar, Pressures EUR/USD Pair

On the US front, Federal Reserve (Fed) members have adopted an increasingly hawkish stance regarding monetary policy. This shift has further strengthened the US Dollar. Remarks from Fed officials, including Atlanta Fed President Raphael Bostic and New York Fed President John Williams, indicating a reluctance to cut interest rates in the near term, have supported the USD's upward trajectory. The EUR/USD pair faced downward pressure due to a stronger US Dollar fueled by the Federal Reserve's hawkish stance. This led to a decline in the EUR/USD pair as investors favored the USD amid reduced expectations of rate cuts.

EUR/USD Reacts to ECB's Cautious Stance and Conflicting Views on Interest Rate Cuts

On the Euro front, ECB President Christine Lagarde's remarks suggesting a cautious approach towards cutting interest rates provided some support to the Euro (EUR). However, following comments from other ECB members advocating for rate cuts due to concerns about economic growth and inflation weighed on the EUR/USD pair.

EUR/USD Price Chart - Source: Tradingview
EUR/USD Price Chart - Source: Tradingview

EUR/USD - Technical Analysis

The EUR/USD pair is showing modest gains in today’s session, trading up by 0.08% at 1.06518. This minor uptick comes as the pair navigates just above the critical pivot point of $1.06280 on the four-hour chart. The currency pair is currently poised between key technical levels that could dictate the near-term trajectory of its movement.

Immediate resistance for the EUR/USD is noted at $1.06851, with further barriers at $1.07260 and $1.07755. These levels must be breached for a stronger confirmation of bullish momentum. Conversely, immediate support lies at $1.05875, with subsequent levels at $1.05491 and $1.05023, which could be tested if bearish pressures resume.

The Relative Strength Index (RSI) at 45 indicates a neutral market sentiment, neither too overbought nor oversold, suggesting potential for either movement direction depending on broader market cues. The 50-Day Exponential Moving Average (EMA) at $1.06984 slightly above the current price, adds to the resistance area that could cap upward movements.

Given the current setup, a strategic approach would involve initiating a long position if EUR/USD ascends above $1.06290, targeting a take profit at $1.06937. This trade should maintain a stop loss at $1.05897 to manage risk efficiently.

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