By RoboForex Analytical Department
The EUR/USD pair is maintaining a neutral stance, trading around 1.0851 on Wednesday, as the market anticipates crucial updates, including the US inflation data for March and the outcome of the European Central Bank (ECB) meeting on Thursday. Given the significant events on the horizon, investors are exhibiting caution.
The US inflation rate for March is anticipated to show a 0.3% month-on-month increase, slightly below February’s 0.4% rise. The core Consumer Price Index (CPI) is also expected to grow by 0.3% month-on-month. The market consensus leans towards the US Federal Reserve reducing its interest rate by 75 basis points throughout 2024, indicating three separate 25-point cuts.
Despite the increase in yields on US government bonds since the start of the year, the US dollar’s reaction has been relatively subdued, with only a 2.5% appreciation against a 47-basis point widening in benchmark bond yields. This disparity suggests that the US dollar may play catch-up with Treasury yields, or bond yields might decrease to close the gap. This raises questions about the timing of this adjustment.
The ECB’s interest rate is expected to remain at 4.5% per annum, with the European regulator likely to wait for the Fed’s move towards easing monetary policy before making its adjustments. This approach is taken even though the eurozone has effectively managed high inflation ahead of other developed economies, theoretically positioning it to adapt its monetary policy sooner.
Technical analysis of EUR/USD
Free Reports:
Download Our Metatrader 4 Indicators – Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter
Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.
The H4 chart analysis of EUR/USD indicates a correction wave to 1.0883 followed by a decrease to 1.0844. A narrow consolidation range has formed above this level, potentially leading to a correction towards 1.0904 before a new decline towards 1.0790, with a continuation to 1.0700 as a possible target. The MACD indicator, with its signal line above zero and the histogram declining, suggests a potential sharp decrease.
The H1 chart shows a consolidation range of around 1.0850, extending to 1.0884. The market has returned to 1.0843, with the possibility of another correction wave to 1.0904 before a downward movement to 1.0790. The Stochastic oscillator, currently below 50, indicates a continuation of the decline towards 20, supporting the bearish scenario.
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.
- Today, investors’ focus is on the PCE Price Index inflation report Apr 26, 2024
- Gold price recovers amid uncertain US economic outlook Apr 26, 2024
- This “Bullish Buzz” Reaches Highest Level in 53 Years Apr 26, 2024
- FastSpring and EBANX Forge Partnership to Expand Pix Payments for Digital Products in Brazil Apr 25, 2024
- Target Thursdays: NAS100, Robusta Coffee, USDCHF Apr 25, 2024
- QCOM wants to create competition in the AI chip market. Hong Kong index hits five-month high Apr 25, 2024
- Japanese yen hits all-time low as BoJ meeting commences Apr 25, 2024
- TSLA shares rose on a weak report. Inflationary pressures are easing in Australia Apr 24, 2024
- USDJPY: On intervention watch Apr 24, 2024
- Euro gains against the dollar amid mixed economic signals Apr 24, 2024