EUR/USD Technical Analysis – April 29, 2024

EUR/USD Technical Analysis – April 29, 2024
EUR/USD Technical Analysis – April 29, 2024

EUR/USD maintains a bullish stance in today’s trading, buoyed by a dip in the US Dollar and positive market sentiment. The pair trades around 1.0710 early Monday, supported by the weaker Dollar which remains under the 106.00 mark. As investors gear up for the upcoming Federal Reserve monetary policy meeting, expected to hold rates steady, all eyes are on potential impacts on the currency markets.

Key Technical Levels

  • Resistance Levels:
    • Daily and Weekly High: 1.07337
    • R1: 1.07389
    • Friday and Last Week High: 1.07525
    • R2: 1.07851
    • R3: 1.08176
    • Monthly High: 1.08850
  • Support Levels:
    • Daily Low: 1.06902
    • Friday Low: 1.06738
    • S1: 1.06602
    • S2: 1.06277
    • Last Week Low: 1.06240
    • Monthly Low: 1.06013
    • S3: 1.05815

The EUR/USD has shown remarkable resilience, trading at its highest level since April 11, around 1.0750. The pivotal 1.0750 level, a Fibonacci 38.2% retracement of the latest downtrend, serves as immediate resistance, with further barriers at 1.0780-1.0790, aligning with the 200-period SMA and the Fibonacci 50% retracement on the 4-hour chart.

Economic Indicators and Market Sentiment

The market mood has been influenced by the recent US GDP data, which came in weaker than expected at an annual rate of 1.6%, versus the expected 2.5%. Although the GDP Price Index rose, signaling inflationary pressures, the USD struggled to gain as risk sentiment favored riskier assets. This scenario underscores a cautious outlook for the Dollar as traders anticipate the Federal Reserve’s rate decision.

The upcoming German CPI and the US Personal Consumption Expenditures (PCE) Price Index data will also be crucial in shaping market expectations and could induce significant volatility in the EUR/USD pair.

Technical Indicators and Outlook

The Relative Strength Index (RSI) on the 4-hour chart indicates overbought conditions, suggesting a potential pullback or consolidation might be near. However, the improving risk sentiment could extend support to the pair’s bullish momentum, particularly if the Fed maintains a steady policy stance.

On the downside, key supports at Fibonacci levels like 1.0700 and 1.0670 offer substantial barriers, with a static level at 1.0650 providing additional cushion. A breach below these could turn the market sentiment bearish, potentially testing lower supports.

As EUR/USD navigates through these technical levels and reacts to upcoming economic releases, traders should remain vigilant and prepare for potential shifts in market dynamics. The technical setup combined with macroeconomic factors presents a mixed bag of opportunities and risks for currency traders.

Trading our dreams into reality,
Mihai Paul Olteanu