EURUSD Technical Analysis – Back to the key support zone

<p>US:</p><ul><li>The Fed <a href="https://www.forexlive.com/centralbank/the-fomc-keeps-the-target-fed-funds-range-at-525-to-550-20230920/">left interest rates unchanged</a> as expected at the last meeting.</li><li>The macroeconomic projections were revised higher,
and the Dot Plot showed that the FOMC still expects another rate hike by the
end of the year with less rate cuts projected in 2024.</li><li><a href="https://www.forexlive.com/centralbank/highlights-from-the-fed-chair-powells-press-conference-after-september-rate-decision-20230920/">Fed Chair Powell</a> reaffirmed their data dependency but added that
they will proceed carefully. </li><li>The <a href="https://www.forexlive.com/news/us-september-cpi-37-yy-versus-36-yy-expected-20231012/">US CPI</a> last week beat expectations on the
headline figures, but the core measures came in line with forecasts and the
market’s pricing barely changed. </li><li>The <a href="https://www.forexlive.com/news/us-august-non-farm-payrolls-187k-vs-170k-expected-20230901/">labour market</a> remains fairly solid as seen once again last week
with the beat in <a href="https://www.forexlive.com/news/us-initial-jobs-claims-209k-versus-210k-estimate-20231012/">Jobless Claims</a>, although continuing claims surprisingly missed. </li><li>The US PMIs
recently showed that the US economy remains pretty resilient. </li><li>The <a href="https://www.forexlive.com/news/us-october-prelim-umich-consumer-sentiment-630-vs-672-expected-20231013/">University of Michigan Consumer Sentiment</a> report last Friday missed across the
board with the inflation expectations figures spiking back up.</li><li>The <a href="https://www.forexlive.com/news/us-september-retail-sales-07-versus-03-expected-20231017/">US Retail Sales</a> this week beat expectations by a big
margin with positive revisions to the prior figures.</li><li>The Fed members continue to cite elevated long-term
yields as a reason to proceed carefully and will likely pause in November as
well.</li><li>The market doesn’t expect the Fed to hike anymore.</li></ul><p>EU:</p><ul><li>The ECB <a href="https://www.forexlive.com/centralbank/ecb-raises-key-rates-by-25-bps-in-september-monetary-policy-meeting-20230914/">hiked by 25 bps</a> at the
last meeting and added a line in the statement that signalled the end of the
tightening cycle.</li><li>President Lagarde didn’t push back against the idea
of them having reached already the terminal rate and highlighted the slowdown
in Eurozone economy.</li><li>The <a href="https://www.forexlive.com/news/eurozone-september-preliminary-cpi-43-vs-45-yy-expected-20230929/">Eurozone CPI</a> recently
missed across the board supporting the ECB’s stance.</li><li>The <a href="https://www.forexlive.com/news/eurozone-august-unemployment-rate-64-vs-64-expected-20231002/">labour market</a> remains
very tight with the unemployment rate hovering at record low levels.</li><li>Overall, the economic data lately has been showing
signs of deterioration in the economy.</li><li>Most ECB members are leaning towards keeping rates
higher for longer now.</li><li>The market doesn’t expect the ECB to hike anymore.</li></ul><p>EURUSD Technical Analysis –
Daily Timeframe</p><p>On the daily chart, we can see that the EURUSD pair
rejected the key <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">resistance</a> around
the <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a> where we
had also the 38.2% <a href="https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/">Fibonacci retracement</a> level
for <a href="https://www.forexlive.com/Education/technical-analysis-confluence-20220318/">confluence</a>. The
pair is now consolidating just above the 1.05 support but keeping a bearish
bias. A break below the support should see more sellers piling in to target the
1.02 handle next. The buyers, on the other hand, will want to see the price
breaking above the trendline to switch the bias from bearish to bullish and
start targeting new higher highs. </p><p>EURUSD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that the price
recently rallied back to the trendline where it got rejected again. This
compression between the support and the trendline might turn into a <a href="https://www.forexlive.com/Education/chart-patterns-guide-20220125/">triangle pattern</a> and
generally a breakout leads to a strong and sustained move. In this case, it
might be best to wait for the price to break on either side as the price action
within the triangle can be messy and erratic. </p><p>EURUSD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see that from
a risk management perspective, the sellers would be better off to short from
the trendline with a defined risk above it. The buyers on the other hand, will
want to go long around the support for an even better risk to reward setup. Alternatively,
more conservative traders can wait for the price to break on either side before
opening new positions. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">Today</a> we will get the latest US Jobless Claims data
and it will be interesting to see if the miss in Continuing Claims last week
was just a blip or the start of a trend. Later in the day, we will also hear
from Fed Chair Powell where the market will be focused on any hint about the
near-term policy outlook, especially after the strength in the economic data
lately.</p>

This article was written by FL Contributors at www.forexlive.com.