EURUSD Technical Analysis – Everything revolves around this key level

<p>Last
week, the <a href="https://www.forexlive.com/news/us-july-non-farm-payrolls-187k-vs-200k-expected-20230804/">NFP missed</a>
expectations for a second time in a row and the previous numbers were all
revised lower. This was seen as a disappointment as the labour market seems to
be a touch weaker than previously expected. Nevertheless, the unemployment rate
fell once again and lessened the disappointment from the miss in the payrolls
number. The worse part for the Fed is that the average hourly earnings beat
expectations, and such high wage growth is not consistent with a sustainable
return to the 2% target. It’s worth reminding though, that the Fed will see
another NFP report before the September meeting, so this NFP doesn’t change much,
but the data leading into the meeting can still weigh on sentiment. </p><p>The ECB, on the other hand, <a href="https://www.forexlive.com/centralbank/ecb-raises-key-rates-by-25-bps-in-july-monetary-policy-meeting-as-expected-20230727/">hiked by 25 bps</a> and
changed a line in the statement that leant more on the dovish side. President
Lagarde didn’t hint to what we can expect next and, in line with the Fed, just
reaffirmed their data dependency and kept all the options on the table. The
data for the Eurozone has been consistently missing expectations, but the
recent <a href="https://www.forexlive.com/news/eurozone-july-preliminary-cpi-53-vs-53-yy-expected-20230731/">inflation</a> and <a href="https://www.forexlive.com/news/eurozone-june-unemployment-rate-64-vs-65-expected-20230801/">employment</a> reports
remained strong justifying another rate hike in September all else being equal.
</p><p>EURUSD Technical Analysis –
Daily Timeframe</p><p>On the daily chart, we can see that EURUSD not only
broke below the 1.1033 <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">support</a> but also
the upward <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a> which
was acting as the last line of defence for the buyers. The bias now is clearly
bearish as the price has breached all the key support levels and the <a href="https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/">moving averages</a> have
crossed to the downside. The first target for the sellers should be the bottom
trendline around the 1.08 handle. </p><p>EURUSD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that the price has
recently rallied following the miss in the NFP report last Friday into a strong
resistance level where we can find the downward trendline, the 50% <a href="https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/">Fibonacci retracement</a> level
and the previous <a href="https://www.forexlive.com/Education/technical-analysis-polarity-20220408/">support turned resistance</a>. This is
where the sellers should pile in with a defined risk above the resistance to
target the 1.08 handle. The buyers, on the other hand, will need the price to
break above the 1.1040 level with conviction to invalidate the bearish setup
and start targeting the highs.</p><p>EURUSD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see that we
have a minor support level at 1.0960. More conservative sellers may want to
wait for the price to break below that level before piling in and ride the
bearish wave into the 1.08 handle. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">This week</a> the
main event will be the US CPI report on Thursday. The market is likely to focus
more on the Core readings as this is what the Fed is more interested in. Higher
than expected data should give the US Dollar a boost as the market’s
expectations will be skewed more on the hawkish side. On the other hand, lower
than expected readings should weigh on the USD as it would support the
soft-landing narrative in the short-term. At the same time of the US CPI data,
we will also see the latest US Jobless Claims report, which is less likely to
move the market since it’s released at the same time of the CPI, but big
surprises should have an effect, nonetheless. Finally, we conclude the week
with the University of Michigan Consumer Sentiment report on Friday where the
market is likely to focus more on the inflation expectations figures. </p><p>See also the video below:</p>

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