Technical Analysis

EUR/USD Price Analysis – April 29, 2024

By LonghornFX Technical Analysis
Apr 29, 20243 min

Daily Price Outlook

The EUR/USD pair has maintained its upward rally and remained well-bid around the 1.0715 level, hitting the intraday high of 1.0734. However, this positive performance was driven by the weakening US dollar, which failed to gain traction despite the Fed's hawkish stance amid a risk-on market sentiment. Meanwhile, investors await key economic indicators from the Eurozone, which make investors hesitate to place a strong bid.

US Dollar Weighed Down by Economic Uncertainty, Supporting EUR/USD Pair

On the other hand, the broad-based US dollar remains under pressure due to uncertainty surrounding the US economic outlook. However, weak preliminary US economic indicators, such as the S&P Global Purchasing Managers’ Index survey for April and Q1 GDP data, have raised concerns about the economy's ability to withstand higher interest rates by the US Federal Reserve (Fed). The uncertainty surrounding the US economic outlook has kept the US Dollar under pressure.

Hence, the weak economic indicators raise concerns about the economy's resilience against potential interest rate hikes, benefiting the EUR/USD pair.

Eurozone Economic Data and ECB Speculation Impacting EUR/USD Pair

Looking forward, the upcoming release of key economic data from the Eurozone, including the preliminary Eurozone Q1 Gross Domestic Product (GDP) and the Consumer Price Index (CPI) data for April, is expected to influence speculation about interest rate cuts by the European Central Bank (ECB). However, investors increasingly anticipate that the European Central Bank (ECB) will begin reducing interest rates at its June meeting, as policymakers consider this action to be sensible.

Therefore, the anticipation of interest rate cuts by the ECB based on upcoming economic data may weaken the Euro against the US Dollar as investors adjust their positions in response to potential policy changes.

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

EUR/USD - Technical Analysis

Today, the EUR/USD pair has shown notable strength, registering a gain of 0.35%, and trading at 1.07288. This upward movement comes as the currency pair tests key technical levels on a 4-hour chart. Currently, EUR/USD hovers slightly above the pivot point of 1.07082, suggesting a possible continuation of the bullish trend if it maintains this momentum.

If the pair sustains above the pivot point, the immediate resistance at 1.07534 could be the next target. Breaching this level might open the path towards higher resistance levels at 1.07777 and 1.08088. Conversely, if the pair reverses its gains, it could find support at 1.06783. Further declines might test subsequent support levels at 1.06431 and 1.06090, marking critical zones that could halt a downward trajectory.

The technical indicators reinforce the bullish outlook, with the Relative Strength Index (RSI) at 57 indicating a slight bullish momentum without venturing into overbought territory. The 50-Day Exponential Moving Average (EMA) sits just below the current price at 1.07043, further supporting the potential for upward movement.

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