The EURUSD pair is targeting 1.10. What's next?

What we have

US economy with mixed signals

The US economy is sending out some conflicting messages. There's good news in terms of job creation, but wage growth and unemployment remain stagnant. Inflation is rising, but the Fed seems confident it won't spiral out of control. Business activity is slowing, and consumer confidence is dropping, suggesting a potential economic slowdown ahead. The Fed is expected to cut interest rates in June to try and boost growth.

And Eurozone that is facing challenges too

The Eurozone also has its issues. Inflation is higher than anticipated, while job growth remains strong. However, the manufacturing sector, particularly in Germany, is showing signs of weakness, contrasting with a healthy service sector. Similar to the US, the ECB is considering lowering interest rates in June to stimulate the economy.

Overall, both the US and the Eurozone face uncertainties. While there are some positive signs, potential slowdowns and rising inflation require close monitoring from central banks who might need to adjust interest rates to steer their economies in the right direction.

EURUSD: The Euro's flexing its muscles!

The Euro has been on a rise against the Dollar lately, almost hitting 1.10 on the daily charts. This is likely because the US Dollar has been a bit unstable due to some not-so-great economic news over there.

So, what does this mean for traders?

• The price is hovering near a favorable point where two factors converge: a trendline hinting at an upward climb and a 21-day moving average acting as a potential support zone. This basically means it could be a good time to buy Euros.
• If the price falls below the trendline, that could signal a shift back down for the Euro. So, sellers would keep an eye on that level to potentially jump in and short the Euro.

Zooming in for a Closer Look (4-hour Chart)

Let's zoom in and look at the 4-hour timeframe. Here, things get interesting for buyers again. There's a price level around 1.0920 where two things converge:

• A trendline suggesting prices might keep climbing.
• The 61.8% Fibonacci retracement level, a common support area after a price dip.

This meeting of trendline and Fibonacci level could be a signal for buyers to jump in.

Where could this be going?

If the price bursts past the current resistance at 1.10, that could indicate a stronger Euro on the horizon. Bullish traders might then set their sights on a price rally towards 1.1145, which was a previous high point for the Euro.

But here's the catch

A big risk for buyers is the price dropping below the trendline. That would suggest the Euro might be losing momentum, potentially favoring sellers. Sellers would be looking for this break to jump in and short the Euro, aiming to profit if the price dips towards a major trendline.

The bottom line

The 4-hour chart shows a potential buying opportunity with a clear risk level (below the trendline). However, if the price breaks below that trendline, things could favor the sellers instead.

The Euro has been gaining ground against the US Dollar, potentially due to a mixed US economic outlook and a weaker Dollar. If you're a trader, the EURUSD pair could present a buying opportunity in the near term, especially if the price breaks above 1.10.

However, be cautious of potential obstacles. A decline below the trendline on the daily chart or 1.0920 on the 4-hour chart could signal a reversal and favor sellers instead. Keep a close eye on both economic data and technical indicators to make informed trading decisions.