Daily Price Outlook
The EUR/USD is trading at 1.1029, up 0.27% from the previous day. The price chart shows the continuous price stability since 24 April with minuscule ups and downs. The Euro extended its upward trend from a recent support line despite a patchwork of inflation data from the Eurozone and updates from the European Central Bank (ECB).
This may be attributed to underwhelming US economic statistics and skepticism regarding the Federal Reserve's role in the recent banking instability.
Today, the Eurozone will release its unemployment rate report for March, which is expected to remain unchanged at 6.6%. The US ADP private payrolls report will also be published later, affecting EUR/USD rates.
The Federal Reserve's two-day policy meeting concluded yesterday, and their decision will be revealed today. A 25 basis point policy rate hike is expected, ranging from 5% to 5.25%. However, the language used in the policy statement regarding a potential halt in tightening could impact the US dollar's value.
The US dollar exhibited a bullish trend on Monday, leading to an increase of over 0.5% in the DXY. However, the momentum was lost on Tuesday, with the DXY falling to 101.87 after releasing the latest US data. Currently, the DXY is traded at 101.63, indicating a decrease of 0.28%.
Shares of PacWest Bancorp and Western Alliance Bancorp have fallen, raising concerns about the banking industry's health and lending support to the US dollar amidst hawkish Fed predictions.
Difficulties in avoiding the expiration of the debt ceiling have affected market sentiment, with the event expected to occur in June instead of July, as suggested by Janet Yellen. These factors could pose a challenge to USD bulls.
In this current environment, volatility is expected to remain high in financial markets, leading to significant swings, including in the EUR/USD pairing. Market participants are closely monitoring the Fed Interest Rate decision that will be released later today.
Daily Technical Levels
Pivot Point: 1.1001
EUR/USD – Technical Outlook
The EURUSD pair rose and broke through the 1.1000 level, settling above it. This strengthens the possibility of continuing the bullish trend in the upcoming sessions and heading towards the first positive target of 1.1075. Breaking this level will result in additional gains that could reach 1.1150.
As a result, the price is expected to rise more in the intraday and short term, with positive momentum helping to achieve the suggested targets. However, if the 1.1000 level is broken, it could halt the current rise and cause the price to test the 1.0945 level again.
The trading range for today is expected to be between support at 1.0960 and resistance at 1.1120.
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