EUR/USD Price Analysis – March 11, 2024

Daily Price Outlook

Despite the renewed strength of the US dollar, the EUR/USD currency pair managed to regain strength and turned bullish around the 1.0948 level. However, the upticks in the pair can be attributed to the Eurozone's steady GDP growth in Q4 2023, which is generally positive for the EUR currency. Furthermore, the ECB's decision to maintain high borrowing costs and Lagarde's cautious tone can also be viewed as positive for the EUR currency.

In contrast to this, the US dollar regained its strength and flashed green at the start of the new week, possibly due to the upbeat US Nonfarm Payrolls data. This was seen as one of the key factors that kept the lid on any additional gains in the EUR/USD pair.

Looking forward, traders are cautious, awaiting cues from upcoming US and German February CPI inflation data, due on Tuesday. US Retail Sales will be in focus on Thursday. These events could influence Fed officials' decisions on the timing of potential interest rate cuts.

Eurozone Economic Outlook and ECB Policy's Impact on EUR/USD Pair

On the Euro front, the European Central Bank (ECB) decided to keep borrowing costs at their highest levels, which was largely anticipated. The ECB's President, Lagarde, was careful in her statements, highlighting the need for more evidence before considering rate cuts.

Furthermore, Eurostat's data for the fourth quarter of 2023 showed that the Eurozone's Gross Domestic Product (GDP) remained unchanged month-on-month and grew by 0.1% year-on-year. This means that the Eurozone's economy didn't decline further but also didn't show strong growth, indicating a period of stability but with cautious optimism for future improvements.

Therefore, the ECB's cautious stance and stable GDP growth in the Eurozone could strengthen the EUR against the USD, reflecting confidence in the Eurozone economy compared to the US.

US Labor Market Strength and Rate Cut Expectations Impact on EUR/USD Pair

On the US front, the February Nonfarm Payrolls data showed a robust labor market with 275K jobs added, surpassing expectations. However, the Unemployment Rate increased to 3.9%, and wage growth slightly dipped to 4.3%. Despite this, Fed Chair Powell indicated that the central bank is cautious about cutting rates, but the prospect of a rate cut in June weakened the dollar against the Euro.

Therefore, the strong US jobs report and potential rate cut expectations weakened the Greenback against the Euro, reflecting market sentiment favoring the Euro over the US Dollar.

EUR/USD - Technical Analysis

The EUR/USD pair experienced a slight decline of 0.04%, positioning the price at 1.09358 on March 11. This subtle movement reflects the currency pair's current stability within a narrowly defined trading range. On the 4-hour chart, the technical landscape highlights a pivot point at 1.09812, indicating the critical level for short-term price direction. Resistance is mapped out at successive levels of 1.10323, 1.10802, and 1.11369, outlining potential hurdles for upward price movements.

Conversely, support levels are placed at 1.09149, 1.08431, and 1.07940, suggesting zones where the market may find a floor to rally. The Relative Strength Index (RSI) at 61 nudges towards the upper end of the neutral range, hinting at a slightly bullish momentum, but without veering into overbought territory. The 50-Day Exponential Moving Average (EMA) at 1.08825 further reinforces the bullish sentiment, as the current price remains above this indicator, suggesting underlying strength in the upward trend.

Considering these factors, a strategic entry for a long position is recommended above 1.09253, with an aim for a take-profit at 1.09852, and setting a stop-loss at 1.08885 to protect against potential downturns.