USD
- The Fed left interest rates unchanged as expected at the last meeting and dropped the tightening bias in the statement.
- The US PCE came in line with expectations.
- The US Jobless Claims missed expectations although the data is still in the recent ranges.
- The latest US PMIs increased further from the prior month with the Manufacturing PMI beating expectations and the Services PMI missing.
- The US Consumer Confidence missed expectations across the board.
- The market expects the first rate cut in June.
EUR
- The ECB left interest rates unchanged as expected at the last meeting maintaining the usual data dependent language.
- The recent Eurozone CPI came in line with expectations with the disinflationary process continuing steady.
- The labour market remains historically tight with the unemployment rate hovering at record lows.
- The Eurozone PMIs beat expectations on the Services side with the measure jumping back into expansion while the Manufacturing one missed dragged lower by Germany’s performance.
- The market expects the ECB to cut rates in June.
EURUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that EURUSD recently got rejected around the 1.09 handle as the sellers stepped in with a defined risk above the level to position for a drop into new lows. The price is now trading around the red 21 moving average and this is where we can expect the buyers to start piling in to position for another rally and target the 1.10 handle.
EURUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price is bouncing on the key support zone around the 1.08 handle where the buyers continue to pile in with a defined risk below it. If the price were to break the black counter-trendline we can expect the buyers to increase the bullish bets into the 1.10 handle. The sellers, on the other hand, will want to see the price breaking below the support to invalidate the bullish setup and increase the bearish bets into new lows.
EURUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the recent price action with the consolidation between the 1.08 support and the black trendline. We should find the sellers around the trendline if the price were to get there, but overall it will be a waiting game until we get a breakout on either side.
Upcoming Events
Today we will see the latest Eurozone CPI and later in the day the US ISM Manufacturing PMI.
