EUR/USD holds above 1.0860, eyes on US CPI, ECB rate decision


  • EUR/USD trades in positive territory near 1.0860 on the weaker USD on Tuesday. 
  • The US March CPI data on Wednesday could provide some hints about inflation trajectory and rate cut expectations. 
  • The ECB is anticipated to keep its Main Refinancing Operations Rate unchanged at 4.5% at its April meeting on Thursday. 


The EUR/USD pair posts modest gains around 1.0860 during the early Asian session on Tuesday. The decline of the US Dollar (USD) provides some support to the major pair. The US NFIB Business Optimism Index and the RCM/TIPP Economic Optimism Index are due on Tuesday, along with the speech by Minneapolis Fed N. Kashkari.

The upbeat US labour market data and the strength of the US economy raised uncertainties about rate cuts from the Federal Reserve (Fed) this year. Minneapolis Fed President Neel Kashkari said last week that he penciled in two interest rate cuts this year but if inflation continues to stall, no rate cuts would be a possible scenario. Financial markets have priced in the 50% odds of rate cuts under 50% for both June and July, lower than at the beginning of April, according to the CME’s FedWatch tool.

The attention this week will shift to the US March Consumer Price Index (CPI) data on Wednesday after February’s annual inflation rate of 3.2% came in higher than expected. The stronger-than-expected figure in March data could dampen expectations for rate cuts in June, while softer inflation figures could fuel speculation for rate reductions.

 Across the pond, the European Central Bank’s (ECB) interest rate decision will be in the spotlight on Thursday. The ECB is widely expected to keep interest rates unchanged at its April policy meeting. Data released last week indicated that inflation fell unexpectedly in March, raising the expectation for ECB rate cuts. Investors will also be looking for any clues about the pace of the easing cycle once it begins. Markets believe there is a greater than 90% chance of an ECB cut in June, according to derivatives prices collected by LSEG.

EUR/USD

Overview
Today last price 1.086
Today Daily Change 0.0022
Today Daily Change % 0.20
Today daily open 1.0838
 
Trends
Daily SMA20 1.085
Daily SMA50 1.0829
Daily SMA100 1.0875
Daily SMA200 1.0833
 
Levels
Previous Daily High 1.0848
Previous Daily Low 1.0791
Previous Weekly High 1.0876
Previous Weekly Low 1.0725
Previous Monthly High 1.0981
Previous Monthly Low 1.0768
Daily Fibonacci 38.2% 1.0826
Daily Fibonacci 61.8% 1.0813
Daily Pivot Point S1 1.0803
Daily Pivot Point S2 1.0769
Daily Pivot Point S3 1.0747
Daily Pivot Point R1 1.086
Daily Pivot Point R2 1.0882
Daily Pivot Point R3 1.0917

 

 

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