EUR Strengthens Against USD as Market Expects Milder Economic Downturn

EUR strengthens as market's most traded currency pair begins the week at 1.0940. The euro (EUR) demonstrates strength as the market's most traded currency pair, commencing the week around 1.0940 against the US dollar (USD).
 
The diminished enthusiasm for the US dollar can be attributed to the anticipation of a soft "downturn" in global economies and the hawkish stance of central banks outside the United States. There is a growing belief among market participants that the G-10 countries will experience a milder economic slump rather than a severe recession, potentially transitioning into a period of stagnation.
 
One key factor contributing to the euro's strength is the European Central Bank's (ECB) hawkish stance. In the past week, the ECB provided clear indications of its preparedness to raise interest rates further, which has bolstered confidence in the euro.
 
Technical Analysis:
 
On the H4 timeframe, the EUR/USD pair has recently completed a third wave of growth, reaching 1.0960. The target for this wave is localized. The market is expected to enter a consolidation range below this level, and if it breaks out downwards, a corrective wave towards 1.0816 could ensue. Once the price reaches this level, a new wave of growth towards 1.1000 is anticipated. This technical scenario is supported by the MACD indicator, as its signal line is currently at its highs and preparing for a decline towards zero.
 

 
On the H1 timeframe, a consolidation range has formed around the level of 1.0816. Upon breaking out above this range, the market has completed the structure of a growth wave, reaching 1.0960. A new wave of corrective decline towards 1.0816 is expected to commence. The Stochastic oscillator also confirms this technical scenario, with its signal line currently below 50 and potentially heading towards 20 during today's trading session.
 

 
Disclaimer
Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.