USD

• The Fed left interest rates unchanged as
  expected at the last meeting and dropped the tightening bias in the statement.
• The US PCE came
  in line with expectations.
• The US ADP and
  the US Job Openings missed
  expectations.
• The latest US ISM
  Manufacturing PMI missed expectations by a big margin
  remaining in contraction with the US ISM Services
  PMI
  following suit but holding on in expansion.
• The US Consumer
  Confidence missed expectations across the board.
• The market expects the first rate cut in June.

EUR

• The ECB left interest rates unchanged as
  expected at the last meeting maintaining the usual data dependent language.
• The Eurozone CPI beat
  expectations.
• The labour market remains historically
  tight with the unemployment rate hovering at record lows.
• The latest Eurozone PMIs beat
  expectations on the Services side with the measure jumping back into expansion
  while the Manufacturing one missed dragged lower by Germany’s performance.
• The market expects the ECB to cut rates in June.

EURUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that EURUSD probed
above the 1.09 handle yesterday but failed to sustain the breakout as the
sellers stepped in with a defined risk above it to position for a drop into the
1.0723 support. The
trend for now remains bullish as the price continues to make higher highs and
higher lows with the moving averages being
crossed to the upside. The buyers will want to see the price breaking higher to
invalidate the bearish setup and start targeting the 1.10 handle.

EURUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that from a risk
management perspective, the buyers will have a much better risk to reward setup
around the trendline where
they will also find the confluence of the
61.8% Fibonacci retracement level
and the daily 21 moving average. The sellers, on the other hand, will want to
see the price breaking below the trendline to invalidate the bullish setup and
increase the bearish bets into the 1.0723 support.

EURUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
buyers have another strong support zone around the 1.0870 where we can find the
confluence of the previous resistance turned
support, the minor trendline, the 61.8% Fibonacci retracement
level and the 4-hour 21 moving average. This is where we can expect the buyers
to step in with a defined risk below the trendline to position for a break
above the 1.09 level and target the 1.10 handle. The sellers, on the other
hand, will want to see the price breaking lower to invalidate this bullish
setup and position for a drop into the major trendline.

Upcoming Events

Today we have the ECB rate decision and the US
Jobless Claims figures, while tomorrow we conclude the week with the US NFP
report.

This article was written by FL Contributors at www.forexlive.com.

The ECB policy meeting decision later is going to be a dud. There’s almost no doubts about that really. The central bank is not in a position to cut rates just yet and so, they can’t really force such a communication in their policy statement in case inflation developments don’t go according to plan in the months ahead. The key rhetoric now is better be safe than sorry.

And that is precisely what we should see in the monetary policy statement later in the day. The ECB should adhere to the following passage:

„Based on its current assessment, the Governing Council considers that the key ECB interest rates are at levels that, maintained for a sufficiently long duration, will make a substantial contribution to this goal. The Governing Council’s future decisions will ensure that its policy rates will be set at sufficiently restrictive levels for as long as necessary.“

Adding to that, the statement should reaffirm a more „data-dependent approach“ as they continue to take stock of economic data over the next few months.

I mean, the ECB has made that quite clear since the start of the year. They have guided markets into pricing out rate cuts in March and April. And they have communicated that they are quite comfortable with traders pricing in the first rate cut for June at the moment.

That of course might change if we do get some surprises in the next two months. But as of today, they are happy with how things have panned out for the time being.

So, what is there to really talk about today?

I think that is exactly the point. The statement should offer nothing for markets to scrutinise. So, all the focus and attention will turn towards Lagarde’s press conference instead.

The main thing that she wants and needs to achieve is to maintain the status quo.

As traders are looking to June for the first rate cut, that is where the ECB is also comfortable with considering recent economic developments. As such, there is no need to deviate from that.

That should make Lagarde’s job relatively simple, no? Well, yes and no.

On the one hand, all she has to do is rehash everything that they have been saying over the last two months. However, if she accidentally let slip any commentary about earlier rate cuts, that will change the whole picture.

The latter might happen as she might feel the need to be more explicit about the ECB’s motives in the months ahead. They have made clear that the next step is likely a rate cut. So, the onus is on Lagarde to build upon that but not too much.

If she does her job well, the events today should be a non-event for the euro and the rates market. And if we do get some outsized reaction otherwise, it would be clear that she definitely bottled the moment.

This article was written by Justin Low at www.forexlive.com.

It is still early in the day with the ECB and US weekly jobless claims coming up. Those events are not likely to offer much but US futures are already showing slight optimism by brushing aside the losses earlier in the session. S&P 500 futures were down as much as 0.4% but are flat on the day currently.

It reaffirms that dip buyers are still seen in the market following the drop on Tuesday this week. Nvidia is continuing to play a big part in that with price closing in on $900 in pre-market. The parabolic run higher in the stock continues to buoy overall sentiment it would seem.

This article was written by Justin Low at www.forexlive.com.

• Firms reported that their output prices rose by an average annual rate of 5.4% in the three months to February (down from 5.6% previously)
• Year-ahead own-price inflation was expected to be 4.3% in the three months to February (unchanged)
• Output price inflation is expected to decline by 1.1% over the next 12 months
• One-year ahead CPI inflation expectations declined to 3.3% (down from 3.4% previously)
• Three-year ahead CPI inflation expectations fell to 2.8% (down from 2.9% previously)
• Expected year-ahead wage growth seen at 5.2% on a three-month-moving-average basis (unchanged)
• Annual wage growth fell to 6.7% in the three months to February (down from 6.8% previously)

Looking at it as a whole, it just reflects some light moderation in price pressures. The good news at least is that prices aren’t really intensifying on the business end. However, how that translates to consumer prices at the end of the day is another debate really. It’s much easier said than done as companies have to watch out for their bottom line. Greed much.

This article was written by Justin Low at www.forexlive.com.

Yesterday,
the S&P 500 finished the day negative as some weak US data started to weigh
a bit on sentiment. The ISM PMIs recently missed expectations with notably the
employment indexes showing contraction. The ADP
yesterday missed forecasts and the Job
Openings were lower than expected with negative revisions to the prior figures.
Moreover, we had Fed Chair
Powell testifying to Congress, but he basically reaffirmed their patient
approach stressing that the timing for rate cuts will be determined by the
incoming data.

S&P 500 Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the S&P 500
bounced around the trendline where we
had also the confluence with the
red 21 moving average and the
previous resistance turned support. This is
where the buyers stepped in with a defined risk below the trendline to position
for a rally into new highs. The sellers, on the other hand, will want to see
the price breaking lower to invalidate the bullish setup and position for a
drop into the next support at 4946.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we
had also the confluence of the 50% Fibonacci
retracement level at the 5048 support. The divergence with
the MACD has
been going on for a long time and it’s generally a sign of weakening momentum
often followed by pullbacks or reversals. In this case, it’s been signalling
pullbacks to the previous swing levels where we continuously found dip-buyers.
A break below the trendline would confirm a reversal and we could even see a
selloff into the 4700 next.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
latest leg higher diverged with the MACD and led to a pullback into the support
zone around the 5048 level. The buyers piled in with a defined risk below the
trendline to target new highs. If the price were to fall back into the support,
we can expect the buyers to defend the level again as a break below it would
likely trigger a selloff into new lows.

Upcoming Events

Today we get the latest US Jobless Claims figures,
while tomorrow we conclude the week with the US NFP report.

This article was written by FL Contributors at www.forexlive.com.