Baxia Markets
June 12, 2024

EURUSD Technical Analysis: Sideways Trading Within Key Levels

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Today, the EURUSD pair was significantly influenced by economic data releases and central bank activities. In the Eurozone, May's year-on-year inflation rate was confirmed at 2.8%, in line with the European Central Bank's cautious monetary stance. This stability underscores the ECB's strategy of closely monitoring inflation trends before considering policy adjustments.

On the other hand, the U.S. CPI data for May revealed a 3.4% year-on-year increase, with core inflation at 3.5%, meeting market expectations. These figures reinforce the Federal Reserve's cautious approach to potential interest rate hikes. The Fed's delicate balancing act between inflation management and economic growth support remains crucial, with market participants eagerly awaiting guidance from the upcoming Federal Open Market Committee (FOMC) meeting.
The interplay between these inflation trends and central bank policies has heightened market sensitivity to future economic releases. The relative stability in Eurozone inflation compared to persistent U.S. inflation pressures could impact interest rate differentials, thereby affecting the EURUSD exchange rate in the short term. Traders are advised to remain vigilant and closely monitor central bank communications for insights into potential market movements.

In the 1-hour trading timeframe, the EURUSD market is currently exhibiting a sideways trend within yesterday's range, displaying a slight bullish bias as it nears the EMA 200. Meanwhile, the EMA 50 is showing signs of flattening out and is approaching a curve toward the EMA 200, indicating that bulls are testing recent highs to assess resistance levels.

Key resistance levels to watch include the EMA 50, EMA 200, and the Ichimoku Cloud. A breakthrough above these critical levels could indicate a strong bullish trend formation. Conversely, crucial support rests at yesterday's low of 1.07196, and a breach below this level may strengthen bearish sentiments, potentially leading to the establishment of new lower lows.

Despite the lack of confirmation from EMA and Ichimoku indicators, oscillators are on the verge of entering the bullish zone. This divergence suggests that the market is undergoing a bearish pullback amidst underlying bullish momentum. Traders are encouraged to closely monitor these technical signals in conjunction with fundamental factors, such as inflation data and central bank policies, to effectively navigate potential market movements.

In conclusion, the EURUSD market is currently influenced by a delicate balance between economic fundamentals and technical indicators. Traders should exercise caution, remain adaptable to changing market conditions, and implement risk management strategies to capitalize on trading opportunities while mitigating potential risks.

Key Takeaways:

  1. ECB cautious amid 2.8% inflation; Fed eyes 3.4% CPI, 3.5% core.
  2. Market sensitivity heightened by inflation trends & central banks.
  3. EURUSD sideway trading with slight bullish sentiment.
  4. Key resistances: EMA 50, EMA 200, Ichimoku Cloud; support at 1.07196.
  5. Oscillators signal bearish pullback amid underlying bullish momentum.

Key Economic Releases to Watch Today

EUR, German CPI (YoY) 

Actual 2.4% vs Forecast 2.4% vs Previous 2.2%    

EUR, German CPI (MoM)

Actual 0.1% vs Forecast 0.1% vs Previous 0.5%   

USD,  Core CPI

Forecast 0.3% vs Previous 0.3%


Forecast 3.4% vs Previous 3.4%


Forecast 0.1% vs Previous 0.3%



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