Fundamental Analysis
In the absence of high-impact data on Monday, July 29, 2024, market sentiment is focused on the key data releases for the week. First, the Federal Reserve’s interest rate decision is set for Wednesday. While no rate change is expected, any adjustment in the statement’s language could signal a more dovish or hawkish stance, impacting the dollar. Additionally, the July non-farm payrolls report, due on Friday, is crucial. A gain of 185,000 jobs is expected, with the unemployment rate holding steady at 4.1%. Strong data could reduce expectations for rate cuts, while disappointing figures might increase speculation about a more flexible policy.
Other economic indicators to watch include the Consumer Confidence Index and JOLTS job openings on Tuesday, the ADP employment report and Chicago PMI on Wednesday, and the ISM manufacturing PMI on Thursday. These data points will provide a broader view of the state of the US economy and could influence future monetary policy expectations, thereby affecting the strength of the USD in the markets.
Technical Analysis, H4. Intraday and Swing Overview
US Dollar Index
Supply Zones (Sell): 104.969 and 105.139
Demand Zones (Buy): 104.129 and 103.689
Following last week’s consolidation and the modest breakout of the H4 resistance at 104.39, a new upward move is anticipated to surpass the 104.45 resistance to confirm a bullish reversal, particularly given the price’s rise during the European session. To maintain a bullish bias, intraday sales might be limited by the broken resistance of the Asian session at 104.29 or, more broadly, the POC from the initial sessions at 104.129. Purchases could then be renewed above 104.45, targeting a reach and potential surpassing of the 104.70 level, towards the next sell zone at 104.969/105.00. On the other hand, an increase in bearish pressures would be confirmed by a break below the demand zone around 104.129 and a further drop below 104.00, in which case the week’s sell targets would be the April support at 103.89 and the demand zone around 103.68.
EURUSD. H1. Intraday
Supply Zones (Sell): 1.08583
Demand Zones (Buy): 1.08297
After reaching the support and daily bearish range average at 1.08297, the first bounce zone is 1.0838/40. If surpassed, consider corrective buys towards 1.0851, the last broken support of the previous bullish correction. Given that the bearish range has already been reached during the European session, it is unlikely that the descent will continue in today’s American session. In this context, the price action reflects a continuation of the pair’s bearish trend, with the next swing targets (starting tomorrow) being the levels at 1.0826, the uncovered POC at 1.0822, and the daily support at 1.0802. However, if the rebound surpasses the supply zone that triggered the price drop at 1.08583 and 1.0869, the correction could extend towards 1.0890.
Note: POC stands for Point of Control, which is the level or area where the highest volume concentration occurred. If a downward movement originated from this point, it is considered a sell zone and forms a resistance area. Conversely, if there was a prior upward movement, it is considered a buy zone, usually located at the lows, forming support areas.
