|

EUR/USD meanders near Thursday's close at 1.0875 ahead of next week’s ECB rate decision

  • The EUR/USD to finish the week with losses of 1.56%.
  • Geopolitics, FOMC minutes, and Fed speaking kept the euro pressured.
  • EUR/USD Price Forecast: The pair is downward biased, but a dragon-fly doji suggests that the pair might consolidate in the near term.

The EUR/USD remains pressured and aims to finish the week on the wrong foot amidst a mixed market sentiment. The EUR/USD is trading at 1.0876 as traders prepare for the weekend.

Geopolitics and hawkish Fed keep sentiment mixed

Investors’ mood was mixed during the North American session. US equities fluctuated while market players’ focus turned to geopolitics and Fed speakers. However, in the next week, the attention will be on March’s Consumer Price Index, which could shed some light on Fed expectations of inflation.

Next week, the European Central Bank (ECB) will have its rate decision. Late in the mid-North American session, Bloomberg sources reported that the ECB is crafting a crisis tool if bond yields jump, but it is still in the design stage. Aside from central banking chatter, the EU announced a subsequent tranche of sanctions on Russian oligarchs and President Putin’s family members.

On Friday, US Treasury yields finished the session with gains along the yield curve, reflecting the aggressive stance of the Fed. The US 10-year benchmark note rose five basis points, sat at 2.701%, and underpinned the greenback, as shown by the US Dollar Index, up 0.09%, currently at 99.834.

The Federal Reserve March meeting minutes showed that most policymakers were looking for a 50-bps increase if not for the Ukraine conflict; instead, the Fed hiked 25 bps. At the same meeting, the US central bank laid the ground to reduce its $9 trillion balance sheet by $95 billion a month, $60 on US Treasuries, and $35 billion on mortgage-backed securities (MBS).

As the Friday North American session is about to finish, money market futures have priced in a 88% chance of a 0.50% rate hike to the Federal Funds Rate (FFR)  in the May 4 meeting.

EUR/USD Price Forecast: Technical outlook

The EUR/USD bias remains downwards and further cemented it when on April 4, the EUR/USD broke the upslope trendline of a rising wedge, which opened the door towards 1.0700, but first would need to overcome some hurdles on its way down. Nevertheless, Friday’s price action is forming a candlestick named a “dragon-fly doji,” which means that bears jumped off the boat as bulls lifted the pair from weekly lows to the 1.0875 region.

That said, the EUR/USD first support would be 1.0848. A breach of the latter would expose the 2022 YTD low at 1.0806, followed by April 2020 swing lows around 1.0727, and then the abovementioned 1.0700 mark.

EUR/USD

Overview
Today last price1.0875
Today Daily Change-0.0002
Today Daily Change %-0.02
Today daily open1.0879
 
Trends
Daily SMA201.1
Daily SMA501.1146
Daily SMA1001.1228
Daily SMA2001.1466
 
Levels
Previous Daily High1.0939
Previous Daily Low1.0865
Previous Weekly High1.1185
Previous Weekly Low1.0945
Previous Monthly High1.1233
Previous Monthly Low1.0806
Daily Fibonacci 38.2%1.0893
Daily Fibonacci 61.8%1.091
Daily Pivot Point S11.0849
Daily Pivot Point S21.082
Daily Pivot Point S31.0776
Daily Pivot Point R11.0923
Daily Pivot Point R21.0968
Daily Pivot Point R31.0997

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

More from Christian Borjon Valencia
Share:

Editor's Picks

AUD/USD falls to near 0.7100 after slipping below 50-day EMA

AUD/USD depreciates after registering minor gains in the previous day, trading around 0.7120 during the Asian hours. The technical analysis of the daily chart shows the pair consolidating sideways within a rectangle pattern, as neither bulls nor bears gain control. The AUD/USD pair is holding a slight bearish tone however as it sits beneath both the nine-day and 50-day EMAs.

160.00: USD/JPY back near intervention territory after upbeat US jobs report

US Nonfarm Payrolls beat expectations by a wide margin in May, with 172K jobs added. The US Dollar rebounds after the release, helping USD/JPY recover from its intraday lows. Warnings from Japanese authorities continue to limit upside potential near the 160.00 threshold.

Gold targets $4,300 amid stronger Dollar

Gold faces increasing selling interest and navigates the area of three-month lows near the $4,300 mark per troy ounce on Friday. The precious metal’s decline comes as traders assess the stronger-than-expected NFP, while the bid bias in the Greenback and higher US Treasury yields also collaborate with the retracement.

Cardano hits five-year low even as Hoskinson clarifies "break" isn't an exit

Cardano (ADA) price is down 10% at press time on Friday, extending losses over 30% so far this week amid Charles Hoskinson's clarification that "break" isn't an exit.

Week ahead – Fed countdown begins amid US inflation data and geopolitical risks

Fed Chair Warsh’s first meeting approaches as key US inflation data could reshape expectations. Oil prices remain elevated as US-Iran talks continue; tariffs also return to the spotlight. ECB is expected to hike; will it be a one-off move or is July live?

The US economy defies the rules: 100 days into the Oil shock and the recession signal is still missing

More than three months after the start of the Iran war and the resulting disruption to global energy markets, the US economy continues to display remarkable resilience. The conflict has triggered a sharp rise in Oil prices, reignited inflationary pressures and fueled widespread concerns about a potential economic slowdown.