EUR/USD 4-Hour Timeframe Analysis
The EUR/USD pair has recently shown signs of potential bullish momentum following a prolonged period of consolidation. After a sustained downtrend, the price entered a phase of uncertainty, creating a range-bound structure. During this consolidation, we identified critical minor and major key levels that could play a pivotal role in future price movements.
A key area of interest lies at the 1.04300 level, which initially acted as resistance. Although the price briefly broke above this level, it turned out to be a false breakout, triggering premature buy orders. Following this, the price dipped below, only to rebound and break through 1.04300 once again, signaling buy-side accumulation. The current market behavior suggests that the price is actively hunting liquidity in the stop-loss zones.
Our strategy is to wait for a short retest above the liquidity zone before entering a buy position. We are setting a buy limit at 1.03850, with a stop-loss (SL) at 1.03140 (50 pips below the minor key level) and a take-profit (TP) at 1.06030, which aligns with the next significant major key level.
Fundamental Insight:
Recent macroeconomic data provides additional context to our technical outlook:
USD Unemployment Claims: Yesterday’s release showed 222K actual versus 219K previous, indicating a slight increase in jobless claims. A higher-than-expected figure may reflect some softening in the U.S. labor market, which could weaken the USD and provide further support for EUR/USD upside.
EUR German Prelim CPI m/m: The upcoming German Consumer Price Index (CPI) forecast is 0.4%, higher than the 0.2% previous reading. An increase in inflation expectations could reinforce hawkish sentiment from the European Central Bank (ECB), potentially strengthening the Euro in the short term.
Market Outlook:
Given the technical setup and supporting fundamentals, we are monitoring a potential bullish move. However, confirmation through a successful retest and alignment with key economic releases remains crucial for trade execution.
Trade Parameters:
Entry: Buy limit at 1.03850
Stop Loss: 1.03140 (50 pips below the minor key level)
Take Profit: 1.06030 (next major key level)
Disclaimer:
This analysis is for informational and educational purposes only and should not be considered financial advice. Trading involves substantial risk, and past performance is not indicative of future results. Always conduct your own research and consult with a financial professional before making any investment decisions.