The USD was sold across the
board on Wednesday following the soft US CPI report. The data made the market to price back
in two cuts for this year. Later in the day though we got a bit more hawkish
than expected FOMC decision where the dot plot showed that the Fed sees just one cut for this
year despite the soft US CPI report.

This gave the greenback a
boost although Fed Chair Powell backpedalled on the projections making them a
bit less worrying as the central bank remains very data dependent. Moreover,
the US Dollar found further support yesterday as the market went into risk-off
mode for unclear reasons.

The EUR, on the other hand,
got hit hard by the European elections as the political uncertainty weighed
on the sentiment and led to some increase in bonds risk premia and selloff in
European stocks.

EURUSD Technical
Analysis – Daily Timeframe

On the daily chart, we can
see that EURUSD broke through the key 1.0727 support
zone today and increased the bearish momentum as the sellers piled in more
aggressively. The target should be around the 1.06 handle. A break below the
1.06 handle would open the door for a drop into the key 1.05 level which is
basically the bottom of the range since late 2022.

EURUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the break of the support where we had also the 61.8% Fibonacci
retracement level for confluence.
From a risk management perspective, late sellers might want to wait for a
pullback into the 1.08 support-turned-resistance
to position for a continuation of the downtrend into the 1.06 handle with a
better risk to reward setup.

The buyers, on the other
hand, will want to see the price rally back above the 1.08 resistance to gain
more control and start targeting the 1.09 level next.

EURUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that the pair is near the lower level of the average
daily range. That’s where we might see a bounce as the price generally
doesn’t extend beyond the levels without a strong catalyst.

Upcoming
Catalysts

Today we conclude the week with the University of Michigan Consumer Sentiment
survey where the data is expected to show an increase to 72.0 vs. 69.1 prior.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

It is shaping up to be a rather risk averse session in European trading today. Equities are falling across the board and bonds are being bid quite strongly on the session. Of note, France’s CAC 40 index is now down over 2% with S&P 500 futures down 0.4% on the day. And 10-year yields in the US are down to 4.21% after having been at a high of 4.27% earlier in Asia trading.

That is all weighing on USD/JPY as risk-off flows come into play. The pair traded to a high of 158.25 following the BOJ policy decision but has now pared all gains to 157.00 on the day.

The dollar is holding firmer for the most part despite that though. EUR/USD is down 0.6% to 1.0675 while GBP/USD is down 0.5% to 1.2695 on the day. USD/CHF is lower amid the negative risk mood, down marginally by 0.1% to 0.8930 currently.

Looking to commodity currencies, USD/CAD is up 0.2% to 1.3765 while AUD/USD is down 0.4% to 0.6605 at the moment.

This article was written by Justin Low at www.forexlive.com.