Ichimoku analysis (4-hour chart)
Tenken-Sen- 1.06853
Kijun-Sen- 1.06968
EURUSD showed a minor pullback on strong market sentiment. The US House of Representatives voted yesterday to raise the debt ceiling limit to avoid default. It hits a high of 1.07052 yesterday and is currently trading around 1.06656.
Major economic data for the day
US ADP Non-farm employment change (12:15 pm)
US ISM manufacturing PMI (2 pm)
Germany's May Prelim CPI came at 6.1% y/y, compared to a forecast of 6.5%.
According to the CME Fed watch tool, the probability of a 25 bpbs rate hike in June decreased to 61% from 33.40% a day ago.
The US 10-year yield showed a 1.5% pullback ahead of the US Non-farm payroll. The US 10 and 2-year spread widened to -76% from -35%.
The pair trades below short-term 21 EMA, 55 EMA, and long-term (200-EMA) in the 4-hour chart. Any indicative break below 1.0600 confirms intraday bearishness; a dip to 1.0570/1.0500 is possible. The near-term resistance is around 1.0720. The breach above targets 1.0765/1.0800/1.0865/1.0900.
Indicator (4-hour chart)
CCI – Bearish
Directional movement index – Bearish
It is good to sell on rallies around 1.0700 with SL around 1.0750 for a TP of 1.0600.
