EUR/USD Technical Analysis – March 13, 2024

In today’s trading session, the EUR/USD pair exhibits a relatively tight range, reflecting a cautious market sentiment following yesterday’s impactful CPI data release from the United States. Let’s delve into the technical landscape and potential trading strategies for today.

Asian Session Review:

The Asian trading hours saw a limited range of only 9 pips, indicating a period of consolidation after the significant movements triggered by yesterday’s US inflation data. This narrow range suggests that traders are taking a breather and reassessing their positions in light of recent developments.

Impact of US CPI Data:

Yesterday’s market was notably influenced by the release of the US CPI figures for February, which came in higher than expected across several metrics:

  • The headline CPI rose to 310.326 against a forecast of 310.3, indicating heightened inflationary pressures.
  • The month-on-month Inflation Rate matched the high expectations at 0.4%, reinforcing concerns over persistent inflation.
  • The Core Inflation Rate, which excludes volatile food and energy prices, also exceeded expectations, coming in at 3.8% year-on-year against a forecast of 3.7%.

These figures contributed to a heightened market volatility, with the EUR/USD reacting accordingly. The pair reached a high of 1.0944 and a low of 1.09014 during the CPI data release, marking key levels for today’s session.

Today’s Technical Setup:

The Pivot Point for today is set at 1.09236, serving as a neutral marker for the pair’s direction. On the upside, we have Resistance levels at 1.09457 (R1), 1.09656 (R2), and 1.09877 (R3). These levels are crucial for bulls to breach if they aim to regain control and push the pair higher.

Conversely, on the downside, Support levels are established at 1.09037 (S1), 1.08816 (S2), and 1.08617 (S3). A break below these levels could signal a continuation of the bearish momentum, particularly if the market remains concerned about inflationary pressures in the US.

Currently, the 89EMA and 200EMA are converging around the price of 1.0928, indicating a potential inflection point. The proximity of these moving averages to the current price and the Pivot Point suggests that the market is in a state of equilibrium, awaiting further cues.

Trading Strategy:

Given the current technical setup and the aftermath of yesterday’s CPI release, traders should remain vigilant and responsive to price action around the identified Pivot Point and EMA levels. A sustained move above the R1 level at 1.09457 could open the path towards R2 and R3, presenting buying opportunities. Conversely, a break below S1 at 1.09037 could indicate bearish momentum, warranting short positions with targets at S2 and S3.

Trading our dreams into reality,

Mihai Paul Olteanu