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Posted on June 07, 2024

EUR/USD Decline to 1.08000: Bearish Divergence Signals Trend Shift

EUR/USD Decline to 1.08000: Bearish Divergence Signals Trend Shift

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Past performance is not indicative of future results. All historical data, including but not limited to returns, volatility, and other performance metrics, should not be construed as a guarantee of future performance. 

EURUSD 1-Hour Timeframe 

 

The EURUSD, also known as Fiber, has been trading in an uptrend on the 1-hour timeframe since the low plotted on May 30, 2024. This uptrend began during a period of a busy economic calendar, which led to turbulent and volatile markets, followed by a recent phase of low volatility and indecisive market behavior. 

Upcoming key events include the much-anticipated Non-Farm Payroll, US Unemployment rate, and US Average Earnings data (both month-on-month and year-on-year), followed by a speech from ECB President Lagarde. These labor data releases will be closely monitored by the FED, and disappointing figures could prompt the FED to consider another rate cut. 

From a technical perspective, the anticipation is evident on the charts with very low volatility. The RSI has not reached overbought or oversold levels for the past three days as investors await today's labor data releases. Price action reflects this uncertainty, showing a slight uptrend but mostly calm, sideways movements. 

If the labor figures are weak, EURUSD buyers (USD sellers) might push prices higher, potentially leading to a breakout of the current range (orange square) and price channel. This move is in line with some technical like the moving averages, and could potentially reach the 1.09122 and even the 1.09390 levels. 

Alternatively, if the US labor data exceeds expectations, EURUSD bears may take control and drive prices lower to the 1.08555 and possibly the 1.08302 levels. A decisive break below the 1.08798 level with a substantial bearish candle would signal this breakout.  

Keep an eye on changing investor sentiment and shifting fundamentals. 

Summary: 

  • EURUSD has been in an uptrend on the 1-hour timeframe since May 30, 2024. 
  • Upcoming key events include Non-Farm Payroll, US Unemployment Rate, US Average Earnings data, and a speech from ECB President Lagarde. 
  • Market volatility is currently low, with RSI levels not reaching overbought or oversold conditions for the past three days. 
  • Weak US labor data could push EURUSD prices higher, potentially breaking the current range. 
  • Strong US labor data may drive EURUSD prices lower, signaling a bearish breakout. 
  • Key levels to watch are 1.09122 and 1.09390 on the upside, and 1.08555 and 1.08302 on the downside. 
     

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