- US Dollar ends positive streak ahead of key US consumer inflation data.
- EUR/USD keeps bullish bias, looks limited and vulnerable to corrections while under 1.1000.
- Ahead of the Asian session, more gains seem likely above 1.0930.
The EUR/USD rebounded from weekly lows as Europe returned from the Easter holiday, trimming Monday’s losses. The pair rose above 1.0900 and more, boosted by a weaker US Dollar ahead of critical US economic data and amid expectations of another rate hike from the European Central Bank (ECB).
Data released on Tuesday showed Eurozone Retail Sales dropped 0.8% in March as expected, and the annual rate worsened to -3% from -1.8%, but it was better than the consensus of -3.5%. The next relevant report of the region will be on Thursday with Industrial Production. Tightening expectations from the ECB point to a 25 basis points rate hike at the May 4 meeting.
Federal Reserve’s Goolsbee mentioned on Tuesday they need to assess the potential impact of financial stress on the real economy while Williams said that if inflation comes down, they will have to lower interest rates. US yields rose on Tuesday but did not help the US Dollar, which was affected by an improvement in risk sentiment.
Attention is set on the March US Consumer Price Index that will be released on Wednesday. The CPI is seen rising by 0.3% and the Core by 0.4% in March on a monthly basis. Later that day, the Fed will publish the minutes of the latest FOMC meeting.
US CPI Preview: US Dollar on the back foot and poised to fall further
EUR/USD short-term technical outlook
The EUR/USD peaked on Tuesday at 1.0927 and then pulled back finding support above 1.0900. Ahead of the Asian session, risks look titled to the upside. The immediate resistance is the 1.0930 area. A break higher would target 1.0950. Above comes the monthly high at 1.0972, the last defense to a test of 1.1000. On the 4-hour chart, the immediate support is seen at 1.0895, a slide below would weaken the Euro. The next support stands at 1.0860, followed by 1.0830.
The daily chart shows the upside bias intact, despite the recent negative streak. The 20-period Simple Moving Average (SMA) awaits at 1.0815, a close below would favor an extension of the correction. On the upside, the Euro needs to break soon the 1.1000 level to open the door to more gains.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
How will US Dollar react to Fed policy announcements – LIVE
The Federal Reserve (Fed) is widely expected to lower the policy rate by 25 bps to the range of 4.5%-4.75% after the November meeting. Chairman Powell's comments on the policy outlook in the aftermath of Donald Trump's victory could drive the USD's valuation.
EUR/USD extends recovery toward 1.0800 as USD retreats ahead of Fed
EUR/USD continues to push higher toward 1.0800 on Thursday. The pair finds support from a broad US Dollar retreat, as traders unwind their Trump win-inspired USD longs ahead of the Federal Reserve's highly-anticipated policy announcements.
GBP/USD rebounds above 1.2950 after BoE policy announcements
GBP/USD trades in positive territory above 1.2950 on Thursday. The Bank of England (BoE) lowered the policy rate by 25 basis points as expected but the upward revision to inflation projections helped the pair edge higher. Market focus now shifts to the Fed's policy decisions.
Gold nears $2,700 as Fed’s announcement looms
Gold recovers following Wednesday's sharp decline and trades above $2,680. The benchmark 10-year US Treasury bond yield edges lower after Trump-inspired upsurge, allowing XAU/USD to hold its ground ahead of the Fed policy decisions.
Outlook for the markets under Trump 2.0
On November 5, the United States held presidential elections. Republican and former president Donald Trump won the elections surprisingly clearly. The Electoral College, which in fact elects the president, will meet on December 17, while the inauguration is scheduled for January 20, 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.