The EURUSD is on the rise due to recent data indicating a Q1 2024 expansion of the German economy. Additionally, the University of Michigan's consumer sentiment revealed 1-year inflation expectations of 3.3%, down from the preliminary 3.5%. Traders will closely monitor the currency pair this week due to the release of significant economic data that could potentially impact currency valuations.
Overview
The EURUSD is on the rise due to recent data indicating a Q1 2024 expansion of the German economy. Additionally, the University of Michigan's consumer sentiment revealed 1-year inflation expectations of 3.3%, down from the preliminary 3.5%. Traders will closely monitor the currency pair this week due to the release of significant economic data that could potentially impact currency valuations.
High Impact Economic Events
Tuesday 02:00 pm (GMT+0): CB Consumer Confidence(USD)
Wednesday 01:30 am (GMT+0): CPI y/y (AUD)
Wednesday All Day (GMT+0): German Prelim CPI m/m (EUR)
Thursday 12:30 pm (GMT+0): Prelim GDP q/q (USD)
Thursday 12:30 pm (GMT+0): Unemployment Claims (USD)
Thursday 02:00 pm (GMT+0): Pending Home Sales m/m (USD)
Friday 01:30 am (GMT+0): Manufacturing PMI (CNY)
Friday 12:30 pm (GMT+0): GDP m/m (CAD)
Friday 12:30 pm (GMT+0): Core PCE Price Index m/m (USD)
Technical Analysis
The EURUSD bounced off the year's low, 1.06010, on April 16 to follow an upward trajectory. On May 3, the currency pair formed a technical reversal to the upside, popularly known as a failure swing in technical analysis. Specifically, the EURUSD exchange rate marked a trough at 1.06493, which failed to move lower than the previous trough at 1.06010. Instead, the price rallied higher to exceed the peak at 1.07528, hence the failure swing. Moreover, the exchange rate moved above the 50-period Exponential Moving Average, and the Momentum oscillator registered values above the 100 baseline. Both technical tools confirmed the bullish outlook.
Potential Upside Targets
If the bulls maintain control of the currency pair, traders may consider the following three potential upside targets:
1.08950: The initial price target is 1.08950, representing the peak marked on May 16.
1.09811: The second price objective is seen at 1.09811, corresponding to the peak marked on March 8.
1.11396: An additional potential price objective could be identified at 1.11396, representing the peak formed on December 28.
Potential Downside Targets
Should the bears take control of the market, traders may consider the following three potential downside targets:
1.08128: The initial support stands at 1.08128, aligning with the peak formed on May 3.
1.07529: The second potential support is found at 1.07529, corresponding to the peak of the failure swing marked on April 26.
1.06493: An additional potential support could be identified at 1.06493, representing the trough of the failure swing, marked on May 1.
Conclusion
The EURUSD is on the rise due to recent data showing a Q1 2024 expansion of the German economy and 1-year inflation expectations of 3.3%, down from the preliminary 3.5%. It is imperative that traders stay abreast of the latest geopolitical and economic developments, exercise caution, and maintain a keen eye on the market trends to make the most of their investments and avoid any potential risks or losses.