EUR/USD Technical Analysis – March 27, 2024

Pivot Point Analysis: The EUR/USD pair starts the day with a daily Pivot Point at 1.084. The currency pair’s movement is expected to be influenced by key resistance and support levels identified for the day.

Resistance and Support Levels:

  • Resistance Levels: R1 stands at 1.08565, followed by R2 at 1.088, and R3 at 1.08964.
  • Support Levels: S1 is positioned at 1.08166, with S2 at 1.08, and S3 at 1.07767.

Market Movements: The pair has shown a tendency for a pullback towards the daily Pivot Point after which it is anticipated to continue its downward trajectory towards the 1.08 mark. Yesterday’s trading session saw the pair sliding from the 100-day SMA resistance near 1.0865, maintaining a bearish stance for the second consecutive day. Despite this, the pair managed to stay above the 1.0800 threshold during the Asian trading hours.

Technical Outlook:

  • On the upside, resistance is initially seen at the March high of 1.0981, followed by the weekly top at 1.0998 and the significant level of 1.1000. Beyond these, the December 2023 peak of 1.1139 could be the next target.
  • On the downside, a decisive break below the 200-day SMA at 1.0837 could intensify selling pressure, potentially leading to a test of the 2024 low at 1.0694, followed by further declines towards historical lows set in late 2023.

Chart Analysis: The 4-hour chart indicates a rebound from recent highs near 1.0870, with initial support found at 1.0801 and subsequent levels at 1.0761. Conversely, resistance is identified at 1.0942, 1.0963, and 1.0998. The MACD remains in negative territory, while the RSI hovers around 45, suggesting a lack of strong momentum in either direction.

Market Sentiment: The market’s focus is on the monetary policy outlook from both the Federal Reserve and the European Central Bank, with expectations leaning towards rate cuts starting in June. The differing pace and strategy of these cuts could influence the EUR/USD pair significantly.

Fed and ECB Perspectives: Recent comments from Fed officials hint at a cautious approach towards rate cuts, with a possibility of easing within the year. On the ECB front, discussions also lean towards a rate reduction, potentially aligning with the Fed’s timeline.

Conclusion: Given the current technical setup and the evolving monetary policy landscape, EUR/USD traders should brace for potential volatility. The pair’s immediate focus remains on maintaining above the 1.0800 level, with a broader outlook suggesting a possible shift towards the 1.0700 area, depending on upcoming economic data and central bank cues. As always, traders should remain vigilant and adjust their strategies in response to market developments.

Trading our dreams into reality,
Mihai Paul Olteanu