As the third week of January progresses, the pair remains in a state of uncertainty, oscillating around the 1.0963 level.
Investors' attention is largely focused on the Federal Reserve's interest rate decisions. Following the release of Consumer Price Index data last Friday, there has been growing skepticism in the market about the likelihood of the Federal Reserve cutting interest rates in March, amid ongoing concerns about whether rates inflation will begin to decline systematically.
Currently, the expected trend of decreasing inflation is being intermittently interrupted by consumer spending patterns. This could potentially lead to a delay in the Federal Reserve's rate adjustment plans, possibly extending into April or May. While such a postponement could bode well for the US dollar, it generally poses unfavorable implications for the stock market.
EUR/USD technical analysis
On the fourth half chart for EUR/USD, a consolidation phase is evident around the 1.0955 level. This pattern is largely considered a correction following a previous downtrend. The formation of a bullish movement is expected, which could reach at least 1.1010. Once this rise is over, a new downward wave could begin towards 1.0833. If this level is broken, there could be a new decline within the prevailing trend, targeting 1.0638 as a local target. The MACD indicator provides technical support for this scenario, with its signal line below zero and histogram above zero both indicating strong bullish momentum towards new highs.
On the EUR/USD H1 chart, the consolidation around 1.0955 continues without a clear directional trend. Currently the market is forming a bullish structure towards 1.0977. Once this price level is reached, there could be a further decline to 1.0955 (test from above), followed by another rise towards the local target of 1.1010. This outlook is technically validated by the stochastic oscillator, with its signal line approaching 80 and about to fall towards 50.
By RoboForex Analysis Department
Disclaimer
Any forecast contained herein is based on the author's personal opinion. This analysis cannot be considered trading advice. RoboForex assumes no responsibility for trading results based on the trading recommendations and reviews contained herein.
