EUR/USD Price Analysis – March 29, 2023
Daily Price Outlook
The EUR/USD is trading 0.05% lower at 1.0838. The rising consumer confidence in the United States and increased expectations for the Federal Reserve's (Fed) monetary policy resulted in a modest decline in the currency pair as risk appetite decreased, weighing the Euro.
US Customer Confidence
According to the Conference Board's report on Tuesday, despite the unexpected turmoil in the banking sector, confidence in the US economy increased in March. However, Americans expect inflation to stay high in the coming year.
The Consumer Confidence Index of the business group improved to 104.2 in March from a previously upwardly revised figure of 103.4. Expectations went up from 70.4 to 73.0, but the index measuring the state of the world dropped from 153 to 151.1.
According to a press release by The Conference Board, the expectations index has been below 80 for 12 of the past 13 months since February 2022. It indicates that a recession might occur within the next year.
According to Chris Rupkey, chief economist at FwdBonds, in a statement released Tuesday, consumers have not lost confidence and assume better days ahead despite recent news headwinds on the expanding bank crisis.
The surge also puts further pressure on the Federal Reserve, trying to keep prices from increasing. The Fed hiked its benchmark lending rate by 25 basis points earlier this month, signaling that it will only raise rates one more time this year.
Traders adjusted their Treasury holdings. As a result, the 10-year Treasury bond yield surpassed 3.57%. The Dollar Index (DXY), which measures the dollar strength, rose by 0.1% to 102.58.
After a two-day rally, the EUR/USD dropped as the dollar gained strength. Looking ahead, traders are awaiting the release of key data such as Final GDP and Unemployment Claims on Thursday.
Bets on ECB rate hikes
On the European front, the publication of the German Harmonized Index of Consumer Prices (HICP) data on Thursday and the Eurozone data on Friday will be significant. The annual German HICP is expected to decline significantly from its previous release of 9.3% to 7.5%.
German inflation is predicted to drop, which would ease some of the tension on the European Central Bank (ECB). A 25 basis point rate hike at the upcoming meeting on May 4 is widely expected. The EUR/USD remains steady, backed by anticipation of more rate rises by the ECB.
EUR/USD Intraday Technical Levels
Support Resistance
1.0813 1.0858
1.0786 1.0876
1.0768 1.0903
Pivot Point: 1.0831
EUR/USD – Technical Outlook
The EURUSD pair managed to surpass the 1.0820 level and maintain its position above it, reinforcing the expectations of continuing the bullish trend on both the intraday and short-term basis. This opens the way for further gains, potentially reaching 1.1032.
The EMA50 continues to support the price from below, reinforcing the suggested positive scenario. We now await the positive momentum needed to sustain the bullish wave.
On the other hand, it is important to note that breaking 1.0805 will halt the current rise and put pressure on the price to test the key support base at 1.0745 before attempting any new positive moves.
The expected trading range for today is between 1.0770 support and 1.0935 resistance.
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