During the Asian session, the EURUSD rebounded from the 161.8 percent Fibonacci Extension in response to Sunday's first round of the French snap parliamentary elections. Later today, the preliminary Consumer Price Index, comprised of 6 German states that report their CPI throughout the day, is expected to be released. The preliminary release is the Eurozone's earliest major consumer inflation. Also, the US ISM Manufacturing Purchasing Managers' Index is due to be released with a potential reading above 50.0, indicating industry expansion.
Overview
During the Asian session, the EURUSD rebounded from the 161.8 percent Fibonacci Extension in response to Sunday's first round of the French snap parliamentary elections. Later today, the preliminary Consumer Price Index, comprised of 6 German states that report their CPI throughout the day, is expected to be released. The preliminary release is the Eurozone's earliest major consumer inflation. Also, the US ISM Manufacturing Purchasing Managers' Index is due to be released with a potential reading above 50.0, indicating industry expansion.
High Impact Economic Events
Monday All Day: German Prelim CPI m/m (EUR)
Monday 02:00 pm (GMT+0): ISM Manufacturing PMI (USD)
Tuesday 09:30 am (GMT+0): Core CPI Flash Estimate y/y (EUR)
Tuesday 09:30 am (GMT+0): CPI Flash Estimate y/y (EUR)
Tuesday 02:00 pm (GMT+0): JOLTS Job Openings (USD)
Wednesday 12:15 pm (GMT+0): ADP Non-Farm Employment Change (USD)
Wednesday 12:15 pm (GMT+0): Unemployment Claims (USD)
Wednesday 02:00 pm (GMT+0): ISM Services PMI (USD)
Wednesday 06:00 pm (GMT+0): FOMC Meeting Minutes (USD)
Thursday 06:30 am (GMT+0): CPI m/m (CHF)
Thursday All Day: Parliamentary Elections (GBP)
Thursday 06:30 am (GMT+0): CPI m/m (CHF)
Friday 12:30 pm (GMT+0): Employment Change (CAD)
Friday 12:30 pm (GMT+0): Unemployment Rate (CAD)
Friday 12:30 pm (GMT+0): Average Hourly Earnings m/m (USD)
Friday 12:30 pm (GMT+0): Non-Farm Employment Change (USD)
Friday 12:30 pm (GMT+0): Unemployment Rate (USD)
Sunday All Day: French Parliamentary Elections (EUR)
Technical Analysis
After reaching the highest exchange rate in June of 1.09161, the EURUSD showed a bearish signal in Technical Analysis known as a non-failure swing. Specifically, the peak at 1.09161 surpassed the previous peak of 1.08950 and then dropped below the trough at 1.07882, indicating the end of the uptrend and the very early start of a new trend in the opposite direction. The 50-period Exponential Moving Average (EMA) confirms the downward trend as prices are trading below the EMA. On the other hand, the Momentum oscillator shows values above the 100 baseline, leading to mixed signals. It's important to note that during the Asian session, the price rebounded from the 161.8 percent Fibonacci Extension.
Potential Upside Targets
If the bulls manage to take control of the EURUSD market, traders may consider the following three potential upside targets:
1.07882: The initial upside target is seen at 1.07882, representing the trough of the non-failure swing marked on May 30.
1.08316: The second price objective is estimated at 1.08316, aligning with the R2 resistance level calculated using the weekly Pivot Point method.
1.09161: The third price objective is calculated at 1.09161, which corresponds to the highest exchange rate reached during the month of June.
Potential Downside Targets
If the bears manage to maintain control of the market, traders may find potential opportunities in the following three downside targets:
1.07094: The initial support level is identified at 1.07094, representing the 161.8 percent Fibonacci Extension drawn from the trough to the peak of the non-failure swing. This coincides with the weekly Pivot Point calculated using the standard method.
1.06659: The second price objective is 1.06659, aligning with the S1 support level calculated using the weekly Pivot Point method.
1.06010: An additional support level is determined at 1.06010, representing the trough formed on April 16.
Conclusion
In conclusion, the EURUSD currency pair is following a downward trajectory in response to Sunday's French Parliamentary Elections and ahead of the German Preliminary Consumer Price Index and the ISM Manufacturing Purchasing Managers' Index. The current downward trend in the EURUSD market suggests that exchange rates may decline even further. To navigate this volatile market, traders must stay on top of economic events and geopolitical changes to make informed trading decisions.