Daily Price Outlook
The EUR/USD is trading around 1.0965. As markets fluctuate, the major currency pair continues to move sideways. The pair reached a three-day high of 1.0990 following US data but then retreated due to volatile equity markets in the US.
However, consolidation persists as investors remain cautious due to uncertainty about the market's outlook.
US Economic Outlook and Its Impact on the EUR/USD Pair
In the US, statistics released on Thursday showed that initial jobless claims increased to 245K for the week ending April 15, exceeding the 240K market estimate. The number of active claims reached its highest level since November 2021.
Additionally, the Philly Fed Manufacturing Survey declined from -23.2 to -31.3. The seasonally adjusted annual rate for existing-home sales also fell to 4.44 million in March, down 2.4% from February.
The US data came in below expectations, which briefly weighed on the US Dollar. DXY is trading slightly lower, around 101.85. Meanwhile, US 10-year bond yields dropped to 3.539%. The weak dollar limited the losses in EUR/USD value.
However, Fed officials remain convinced that the central bank will continue to raise interest rates. According to Reuters, Cleveland Federal Reserve President Loretta Mester emphasized on Thursday that the Fed has to do more to address the US inflation rate, which is still too high. She continued by saying that the Fed would have to raise its policy rate to over 5% and maintain it there for a time.
Looking ahead, S&P Global PMIs are expected on Friday. The initial figure for April will provide a first glimpse of economic activity. Disappointing data could dampen market sentiment, which would be favorable for the US Dollar but detrimental to the EUR/USD.
Eurozone Consumer Confidence
In the Eurozone, preliminary Consumer Confidence for April increased to -17.5 from -18.5 expected and -19.2 previously released. It may be due to continued reductions in inflationary pressures following significant efforts by the European Central Bank.
Furthermore, the minutes of the ECB March meeting revealed that had it not been for the banking crisis, the central bank would have been more confident in signaling rises ahead. Led by its President Christine Lagarde, ECB policymakers continued claiming that inflation is too high and that the central bank must do "all they can" to bring it down to its aim of 2%.
Moreover, expectations for future rate rises increase as banking fears subside. The only issue at the May 4 meeting will be the extent of the rate increase—25 or 50 basis points. The EUR/USD recovered, but gains suffered due to market sentiments.
Daily Technical Levels:
Pivot Point: 1.0964
EUR/USD – Technical Outlook
The EURUSD pair did not display any significant movement yesterday, oscillating within a sideways range and hovering around the EMA50, while still being confined between the key levels represented by 1.0945 support and 1.0980 resistance.
This maintains our neutrality for now, as we await the breach of one of these levels to clearly determine its subsequent targets. We remind you that breaking the mentioned support will exert pressure on the price to achieve further bearish correction, with its next target reaching 1.0860.
On the other hand, breaching the resistance serves as the key to resuming the primary bullish trend, with its targets beginning at the 1.1075 level. The expected trading range for today is between 1.0870 support and 1.1060 resistance.
JOIN LONGHORNFX TODAY
24/7 live support, lightning fast withdrawals, guaranteed safe and reliable trading platforms with a true ECN broker.