- EUR/USD stable as markets await key economic events in the week.
- Focus on US CPI, expecting inflation moderation monthly, annually.
- ECB decision eyed, with rate adjustment speculation affecting Euro.
The Euro failed to gain traction against the US Dollar, registered minuscule losses of 0.02%, yet hovers at around the 1.0850 area, capped by dynamic support and resistance levels, namely daily moving averages (DMAs).
EUR/USD hovers around 1.0850, with markets eyeing upcoming economic releases
The economic docket was scarce on both sides of the Atlantic as market participants prepared for Wednesday's release of US inflation data and Thursday's European Central Bank (ECB) monetary policy decision.
The US Consumer Price Index (CPI) for March is anticipated to increase by 0.3% month-over-month, which is below the 0.4% increase in February, while annually, the CPI is expected to escalate from 3.2% to 3.4%. The core CPI, which excludes volatile food and energy prices, is forecasted to decrease from 0.4% to 0.3% month-over-month and from 3.8% to 3.7% year-over-year.
The ECB is expected to keep rates unchanged on April 11, but odds are increasing that President Lagarde and Co. will likely need to ease policy in June if they want to achieve a soft landing.
That would widen the interest rate differentials between the Eurozone (EU) and the US, favoring further EUR/USD downside.
EUR/USD Price Analysis: Technical outlook
With price action capped on the upside by the 100-DNA at 1.0872, buyers remain unable to challenge the 1.0900 figure, which could pave the way to challenge higher levels, like the March 21 high at 1.0942, followed by March’s 8 swings high at 1.0984. On the other hand, if sellers clear the confluence of the 50 and 200-DMAs at around 1.0830s, the EUR/USD could challenge the 1.0800 mark. Further downside is seen at the 1.0750 psychological level, ahead of the April 2 low of 1.0724.
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