EUR/USD Faces Resistance: A Technical and Fundamental Analysis
Updated
EUR/USD encountered resistance following an initial bullish surge on Wednesday, subsequently retreating slightly below the 1.09450 level in Thursday's European morning session. The price action indicates a potential reversal, with the currency pair trading within a supply area and the 61.8% Fibonacci level suggesting a bearish setup. Additionally, a sell limit has been set at 1.1000 in anticipation of a false breakout, with the RSI potentially signaling overbought conditions in this scenario.
Later in the day, market participants will closely monitor the release of February's Retail Sales and Producer Price Index (PPI) data from the US. Retail Sales are projected to rebound by 0.8% in February after a contraction of 0.8% in January, while the monthly PPI is expected to increase by 0.3%, matching January's rise.
The outcome of these data releases could influence the direction of the USD. A Retail Sales reading near 0% may exert downward pressure on the USD, while a stronger-than-expected increase in monthly PPI could prompt a USD-positive reaction. However, if the data are mixed, initial market reactions may be misleading, and bond market dynamics may provide valuable directional clues. A sustained uptrend in yields could bolster the USD, whereas a retreat below 4.2% in the 10-year yield might have the opposite effect.
Given these technical and fundamental factors, traders are advised to watch for signs of a potential reversal in EUR/USD's price action.
Later in the day, market participants will closely monitor the release of February's Retail Sales and Producer Price Index (PPI) data from the US. Retail Sales are projected to rebound by 0.8% in February after a contraction of 0.8% in January, while the monthly PPI is expected to increase by 0.3%, matching January's rise.
The outcome of these data releases could influence the direction of the USD. A Retail Sales reading near 0% may exert downward pressure on the USD, while a stronger-than-expected increase in monthly PPI could prompt a USD-positive reaction. However, if the data are mixed, initial market reactions may be misleading, and bond market dynamics may provide valuable directional clues. A sustained uptrend in yields could bolster the USD, whereas a retreat below 4.2% in the 10-year yield might have the opposite effect.
Given these technical and fundamental factors, traders are advised to watch for signs of a potential reversal in EUR/USD's price action.
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