EURUSD Technical Analysis – Watch what happens at this key trendline

<p>US:</p><ul><li>The Fed <a href="https://www.forexlive.com/centralbank/federal-reserve-interest-rate-decision-25-bps-rate-hike-to-525-550-20230726/">hiked by 25 bps</a> as
expected and kept everything unchanged.</li><li>Fed Chair Powell reaffirmed their data dependency
and kept all the options on the table.</li><li>The US economic data keeps on surprising to the
upside, but inflation expectations and CPI readings continue to show
disinflation with the last two <a href="https://www.forexlive.com/news/us-june-cpi-02-mm-versus-02-mm-expected-20230810/">Core CPI M/M</a> figures
coming in at 0.16%. </li><li>At the moment, the market doesn’t expect another
hike from the Fed, but the next NFP and CPI data will be crucial to confirm or
change this view. </li></ul><p>EU:</p><ul><li>The ECB <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. </li><li>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. </li><li>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.</li><li>The market is expecting a 25 bps rate hike in
September. </li></ul><p>EURUSD Technical Analysis –
Daily Timeframe</p><p>On the daily chart, we can see that EURUSD has been
falling pretty strongly since the fakeout above the top <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a> around
the 1.12 handle. The trend remains clearly bearish as the price has been
printing lower lows and lower highs and the <a href="https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/">moving averages</a> are
crossed to the downside. At the moment, we are seeing a pullback as the price
has bounced from the <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">support</a> area
around the 1.0840 level. We can see that we are approaching a downward
trendline where we have also the <a href="https://www.forexlive.com/Education/technical-analysis-confluence-20220318/">confluence</a> with the
red 21 moving average. This is where the sellers are likely to pile in with a
defined risk above the trendline to target 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
been <a href="https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/">diverging</a> with the
<a href="https://www.forexlive.com/Education/technical-analysis-understanding-macd-20220427/">MACD</a> right
when it was approaching the support area at 1.0840. This is generally a sign of
weakening momentum often followed by pullbacks or reversals. In this case, we
are seeing a pullback into the trendline where we can also find the <a href="https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/">Fibonacci retracement</a> levels
for further confluence. A break above the trendline would give the buyers more
conviction for a bullish trend and the first target would be the 1.1033 level. </p><p>EURUSD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see that we
recently broke out of the <a href="https://www.forexlive.com/Education/chart-patterns-guide-20220125/">falling wedge</a>, which
is generally a reversal pattern and the target should be the top of the pattern
around the 1.0950 level. Therefore, everything points to that trendline
resistance, so it will be a “make it or break it” moment for the sellers. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">This week</a> is
pretty empty on the economic data side as we will only have the PMIs tomorrow
and the US Jobless Claims on Thursday. Given the strong appreciation in the US
Dollar seen in the past weeks, we can expect some USD weakness if the data
misses expectations, and we will likely need much stronger than expected
readings to see another sustained rally in the greenback. Remember also that
this is the Jackson Hole Symposium week, so we will hear from many central
bankers including Fed Chair Powell, who is set to speak on Friday. </p><p>See also the video below:</p>

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