EURUSD continues to rise: demand for risk wins over caution

The EURUSD pair remains in positive territory, but the market acts carefully. It has yet to evaluate the consequences of an assassination attempt on Trump.

EURUSD trading key points

• Political events affect the EURUSD trajectory
• US manufacturing inflation exceeded expectations
• EURUSD price targets: 1.0858, 1.0808, and 1.0950

Fundamental analysis

The EURUSD pair suspended but did not halt its growth, with the main movements around 1.0892 at the start of the week.

Friday’s US statistics were surprising. The producer price index in June rose by 0.2% m/m from the zero value in May in line with the 0.2% forecast. The indicator increased by 2.6% year-over-year from the previous 2.4%. Manufacturing inflation is rising, which may alert the US Federal Reserve and prompt it to maintain elevated interest rates longer than necessary.

The University of Michigan consumer sentiment index dropped to 66.0 points in July, falling short of forecasts of 69.5, which may also be attributed to the inflationary environment.

The weekend events could not but impact the market. This refers to the incident with former US President Donald Trump, who was shot in the ear at his rally in Pennsylvania.

The accident will unlikely affect US investment ratings and sympathies with the US dollar. However, the presidential race will certainly gain more attention, which may trigger increased volatility in the EURUSD pair.

EURUSD technical analysis

On the H4 chart, the EURUSD pair has formed a consolidation range around 1.0888 and extended it to 1.0910. Today, 15 July 2024, the market returned to 1.0881. The price is expected to breach this level and extend the range down to 1.0858, representing the first target for correction. A corrective wave could practically form, with the main target at 1.0808. After the correction, another growth structure might develop towards 1.0950, marking the completion of growth potential.

Summary

Volatility in the EURUSD pair will increase during the US presidential race. Technical indicators point to a further correction towards the 1.0808 target. A growth wave could start once the correction is complete, aiming for 1.0950.