EUR/USD jumps to daily highs near 1.1765, US PPI, FOMC eyed

  • Fresh US dollar weakness drives EUR/USD back above 1.1750.
  • Will the upside last on hawkish FOMC statement?

The EUR/USD pair caught a fresh bid-wave and jumped beyond the 1.1750 barrier in mid-Europe, as the US dollar faced rejection near 94.00 levels versus its main peers.  The USD bulls took a breather heading into the US PPI release while the main focus remains on the FOMC decision due later at 1800 GMT for the next push higher.

The monetary policy divergence between the Fed and ECB will continue to keep any upside attempts capped in the common currency, as the Fed remains on track to hike rates by 25bps today. Also, markets will closely await the Fed’s forward guidance to gauge further rate hikes this year.

On the other hand, the ECB is expected to call for restraint and keep rates on hold, in light of the recent regional political instability. However, a gradual shift towards a less accommodative monetary policy stance could be signaled by the ECB tomorrow, which could offer some temporary respite to the EUR bulls.

Calendar-wise, the Eurozone industrial output fell more-than-expected while the Q1 employment change figures bettered estimates. All eyes now remain on the US PPi data and Fed verdict for fresh dollar trades.

EUR/USD Technical Levels

According to Slobodan Drvenica, Information & Analysis Manager at Windsor Brokers, “Daily techs are weakening as momentum turned south and MA’s turning to bearish setup and keeping negative near-term tone. Falling 30SMA maintains pressure and marks key barrier (1.1780), break of which would ease downside pressure. EU industrial production is the highlight of the European session and could put the Euro under fresh pressure if release comes in line or below the forecast (Apr f/c -0.5% vs Mar 0.5%).. Res: 1.1753; 1.1780; 1.1809; 1.1839. Sup: 1.1720; 1.1713; 1.1674; 1.1652.”

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