EUR/USD Forecast: Hot US CPI triggers risk aversion
Premium|Take advantage of 50% OFF on your first month.
Start your subscription and get access to all our original articles.
You have reached your limit of 5 free articles for this month.
Get all exclusive analysis, access our analysis and get Gold and signals alerts
Elevate your trading Journey.
UPGRADEEUR/USD Current price: 1.0788
- The US Consumer Price Index rose 3.5% YoY in March, core annual CPI rose 3.8%.
- The FOMC Meeting Minutes will be out in the American afternoon.
- EUR/USD collapsed with fears and is technically poised to extend its slump.
The EUR/USD pair traded uneventfully around the 1.0850 mark for most of this Thursday as investors held in wait-and-see mode ahead of the release of the United States (US) Consumer Price Index (CPI). The Bureau of Labor Statistics (BLS) finally reported that the March CPI was up by 0.4% MoM and 3.5% YoY, higher than anticipated. Core figures also surpassed expectations, all of which indicate stubbornly high inflation. As a result, financial markets turned risk-averse, with the US Dollar soaring across the FX board, as the news gave room to the Federal Reserve (Fed) to further delay a potential rate cut.
The Fed will publish the Federal Open Market Committee (FOMC) meeting minutes next. The document's impact will likely be limited after the latest comments from Fed Chair Jerome Powell, indicating that policymakers are in no hurry to trim rates, given inflation is still above target and the economy's resilience to higher rates.
Investors will shift their focus to the European Central Bank (ECB), which will announce its decision on monetary policy on Thursday. The ECB is widely anticipated to keep rates on hold, and attention will turn to whether policymakers are leaning towards trimming interest rates in June.
EUR/USD short-term technical outlook
The EUR/USD trades below the 1.0800 threshold, and technical readings in the daily chart suggest further slides are likely. The pair plummeted below all its moving averages after meeting sellers around a flat 100 Simple Moving Average (SMA). At the same time, technical indicators head firmly south within negative levels, retreating from their midlines and suggesting sellers are now in control.
In the near term, the 4-hour chart also supports a bearish continuation, given that technical indicators head south pretty much vertically. Indicators remain above oversold readings, which keeps the door open for additional slides. Finally, EUR/USD trades below all its moving averages, with the 20 SMA gaining downward traction around 1.0840, reinforcing the resistance area.
Support levels: 1.0760 1.0720 1.0685
Resistance levels: 1.0800 1.0840 1.0875
EUR/USD Current price: 1.0788
- The US Consumer Price Index rose 3.5% YoY in March, core annual CPI rose 3.8%.
- The FOMC Meeting Minutes will be out in the American afternoon.
- EUR/USD collapsed with fears and is technically poised to extend its slump.
The EUR/USD pair traded uneventfully around the 1.0850 mark for most of this Thursday as investors held in wait-and-see mode ahead of the release of the United States (US) Consumer Price Index (CPI). The Bureau of Labor Statistics (BLS) finally reported that the March CPI was up by 0.4% MoM and 3.5% YoY, higher than anticipated. Core figures also surpassed expectations, all of which indicate stubbornly high inflation. As a result, financial markets turned risk-averse, with the US Dollar soaring across the FX board, as the news gave room to the Federal Reserve (Fed) to further delay a potential rate cut.
The Fed will publish the Federal Open Market Committee (FOMC) meeting minutes next. The document's impact will likely be limited after the latest comments from Fed Chair Jerome Powell, indicating that policymakers are in no hurry to trim rates, given inflation is still above target and the economy's resilience to higher rates.
Investors will shift their focus to the European Central Bank (ECB), which will announce its decision on monetary policy on Thursday. The ECB is widely anticipated to keep rates on hold, and attention will turn to whether policymakers are leaning towards trimming interest rates in June.
EUR/USD short-term technical outlook
The EUR/USD trades below the 1.0800 threshold, and technical readings in the daily chart suggest further slides are likely. The pair plummeted below all its moving averages after meeting sellers around a flat 100 Simple Moving Average (SMA). At the same time, technical indicators head firmly south within negative levels, retreating from their midlines and suggesting sellers are now in control.
In the near term, the 4-hour chart also supports a bearish continuation, given that technical indicators head south pretty much vertically. Indicators remain above oversold readings, which keeps the door open for additional slides. Finally, EUR/USD trades below all its moving averages, with the 20 SMA gaining downward traction around 1.0840, reinforcing the resistance area.
Support levels: 1.0760 1.0720 1.0685
Resistance levels: 1.0800 1.0840 1.0875
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.