EUR/USD Price Analysis – April 05, 2023
Daily Price Outlook
The EUR/USD pair has been trading sideways after rising above 1.0970 in the early Asian session. Investors are eagerly awaiting the release of US Automatic Data Processing (ADP) Employment and ISM Services PMI data, which could affect the currency pair's movement.
US Dollar Index refreshes monthly low as Fed's status-quo decision looms
On Tuesday, the S&P 500 ended the day with losses as investors became cautious before the US economic reports, leading to a decrease in risk appetite. The US Dollar Index (DXY) also hit a monthly low near 101.46 as investors anticipated the Federal Reserve (Fed) maintaining the status quo for its May monetary policy meeting.
The CME Fedwatch tool indicates a 60% likelihood of the Fed's interest rate decision remaining unchanged. The Fed is expected to focus on contracting manufacturing activities to prevent the US economy from slipping into a recession. The release of US economic data on Wednesday is expected to provide more clarity.
Weak job openings data indicates US labor market is cooling
According to consensus, the US economy added 200,000 new jobs in March, which is lower than the previous addition of 242,000. However, if the US labor market continues to remain tight, there is still hope for one more rate hike from the Fed. On Tuesday, data revealed lower talent acquisition requests, dropping to 9.9 million compared to January's 10.5 million and market expectations of 10.4 million.
US ISM Services PMI expected to contract, keeping investors busy
Aside from US Employment data, investors are also keeping an eye on the US ISM Services PMI. It is expected to decline from 55.1 to 54.5, and the New Orders Index, which reflects forward-demand, is expected to drop from 62.6 to 57.6.
In the Eurozone, ECB policymakers are pleased as consumer inflation expectations for the next 12 months fell to 4.6% in February from January's 4.9%. However, the data does not include the recent increase in oil prices, which could affect the outlook. ECB President Christine Lagarde is expected to continue hiking rates.
EUR/USD Intraday Technical Levels
Support Resistance
1.0843 1.0946
1.0782 1.0988
1.0740 1.1049
Pivot Point: 1.0885
EUR/USD – Technical Outlook
The EUR/USD pair has surged and crossed the resistance level of 1.0900 and is currently trading above it, indicating a positive trend for the day. There is an expectation for further upward movement towards the next target of 1.1032.
The EMA50 is supportive of the bullish trend, and it is expected that the price will gain positive momentum to reach the target.
The bullish trend is likely to continue in the upcoming sessions unless there is a break below 1.0880 and if it stays below that level. The trading range for the day is expected to be between the support level of 1.0840 and the resistance level of 1.0990.
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