EUR/USD aims to stabilize above 1.0850 as US Dollar faces pressure


  • EUR/USD focuses on shifting its auction range above 1.0850 as the US Dollar drops.
  • Weak US Manufacturing PMI has prompted expectations of Fed rate cuts in June.
  • Eurozone’s high monthly inflation growth has eased early ECB rate-cut expectations.

The EUR/USD pair aims to shift the trading range above the crucial resistance of 1.0850. The major currency pair strengthens as the US Dollar remains on the back foot and hopes of early European Central Bank (ECB) rate cuts drop further.

The overall market action seems disordered as the S&P 500 futures are slightly down while risk-sensitive currencies perform well. The US Dollar Index (DXY) drops to 103.80 as expectations for a rate cut by the Federal Reserve (Fed) have escalated.

The CME FedWatch tool shows a 58% chance that interest rates will be down by 25 basis points (bps) in the June policy meeting. The expectations for a rate-cut were at 53% before the February’s ISM Manufacturing PMI data, released on Friday.

The ISM reported the Manufacturing PMI at 47.8, lower than expectations of 49.5 and the former reading of 49.1. The agency reported that the fresh factory orders index has also come down significantly, indicating that recovery in the Manufacturing PMI has stalled.

Going forward, the market participants will focus on the Fed Chair Jerome Powell’s testimony before Congress in which he is expected to reiterate the need of having convincing evidence, which will confirm that inflation is on track to the 2% target.

On the Eurozone front, stickier-than-expected preliminary inflation data for February has pushed back expectations of early rate cuts by the ECB. The fears of persistent inflation deepened as the monthly headline and core inflation data grew strongly by 0.6% and 0.7%, respectively.

EUR/USD

Overview
Today last price 1.0854
Today Daily Change 0.0016
Today Daily Change % 0.15
Today daily open 1.0838
 
Trends
Daily SMA20 1.0791
Daily SMA50 1.0872
Daily SMA100 1.0826
Daily SMA200 1.0829
 
Levels
Previous Daily High 1.0843
Previous Daily Low 1.0798
Previous Weekly High 1.0866
Previous Weekly Low 1.0796
Previous Monthly High 1.0898
Previous Monthly Low 1.0695
Daily Fibonacci 38.2% 1.0826
Daily Fibonacci 61.8% 1.0815
Daily Pivot Point S1 1.0809
Daily Pivot Point S2 1.0781
Daily Pivot Point S3 1.0764
Daily Pivot Point R1 1.0854
Daily Pivot Point R2 1.0871
Daily Pivot Point R3 1.09

 

 

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