The EUR/USD pair is exhibiting resilience, navigating around the 1.0850 mark on Tuesday, following a sequence of rises in the previous two sessions. The current market atmosphere is one of cautious optimism, as participants brace for significant upcoming events, including a speech by Jerome Powell, the head of the US Federal Reserve, and the release of February’s employment sector statistics on Friday. Particularly, the focus will be on the wage growth components for February, which are speculated to have nearly tripled, potentially indicating a diminishing impact of pro-inflationary factors.
The consensus among market observers is leaning towards an expectation that the Federal Reserve may initiate the first interest rate cut of this monetary cycle in June, with possibilities of further reductions occurring up to three times by year-end.
EUR/USD technical analysis
On the H4 chart, the EUR/USD pair is currently carving out a consolidation pattern around the 1.0831 level, with a recent extension up to 1.0866. A downward correction to 1.0831, testing the level from above, could materialize today. An upward break from this consolidation could herald the start of a growth wave towards 1.0900, at which point the current growth phase is anticipated to conclude, potentially giving way to a new downtrend with an initial target at 1.0680. This outlook is supported by the MACD indicator, which shows the signal line above zero and a sharply rising histogram, indicating a continuation of the growth trend.
The H1 chart reveals a consolidation phase around the 1.0831 level, with a growth structure targeting 1.0870 currently unfolding. The local target of 1.0866 for this wave has been achieved, with a correction back to 1.0831 anticipated. Following this correction, the focus will shift towards the structure’s growth potential to 1.0870. The Stochastic oscillator, currently below the 50 mark and expected to drop to 20, validates this scenario, suggesting a potential for further fluctuations within this bullish trend.