Daily Analysis EURUSD - 7 June 2023

The European Central Bank (ECB) plans to raise interest rates by 25 basis points in the upcoming week, with a potential additional hike in July. The market has already factored in the June hike, and future decisions will depend on economic data. Recent figures released on Tuesday indicate that retail sales in the Eurozone remained stagnant in April, showing a 2.6% decline compared to the previous year, which indicates consumer caution. The German report also showed a weakening trend, with a 0.4% month-on-month decline in factory orders for April. In addition, the monthly ECB survey revealed a decrease in inflation expectations to 4.1% in April. On Wednesday, German industrial production data will be released.

On Tuesday, the US Dollar experienced a slight increase against various currencies as Wall Street saw marginal gains. Market participants are exercising caution as they approach a crucial week, given the gloomy global economic outlook and the anticipation of higher interest rates. The Federal Reserve is currently in a media blackout period leading up to the upcoming FOMC meeting next week. Some analysts warn that the outcome is uncertain, with the May Consumer Price Index, scheduled for release next Tuesday, being a key factor in the decision-making process.

Selling pressures on the EUR/USD pair persist, indicating a bearish trend with a well-defined structure and suggesting further selling to occur. The upcoming notable resistance level for the EUR/USD is roughly 1.0750, which aligns with the convergence of the 100-day moving average and the downward parallel of the bearish channel. Conversely, the subsequent support levels are located around 1.0640, followed by 1.0600.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0900	1.0850	1.0750	1.0700	1.0640	1.0600