- The Fed left interest rates unchanged as
expected while dropping the tightening bias in the statement but adding a
slight pushback against a March rate
- Fed Chair Powell stressed
that they want to see more evidence of inflation falling back to target and
that a rate cut in March is not their base case.
- The latest US GDP beat
expectations by a big margin.
- The US PCE came
mostly in line with expectations with the Core 3-month and 6-month annualised
rates falling below the Fed’s 2% target.
- The US NFP report
beat expectations across the board by a big margin.
- The ISM Manufacturing
surprised to the upside with the new orders index, which is considered a
leading indicator, jumping back into expansion. Similarly, the ISM Services PMI beat
expectations across the board with the employment sub-index erasing the prior
drop and prices paid jumping above 60.
- The US Consumer
Confidence report came in line with expectations but
the labour market details improved considerably.
- The market now expects the first rate cut in May.
- The ECB left interest rates unchanged as
expected maintaining the usual data dependent language.
- The recent Eurozone CPI came
in line with expectations with the disinflationary process continuing steady.
- The labour market remains historically
tight with the unemployment rate hovering at record lows.
- The Eurozone PMIs beat
expectations on the Manufacturing side but missed on the Services one with both
measures remaining in contraction.
- The ECB members recently have been pushing back
against the aggressive rate cuts expectations.
- The market expects the ECB to cut rates in April.
EURUSD Technical Analysis –
On the daily chart, we can see that EURUSD bounced
from the key support zone at
the 1.0723 level and pulled back into the blue 8 moving average. The
price was overstretched following the US NFP report as depicted by the distance
from the 8 moving average. In such instances, we can generally see a pullback
into the moving average or some consolidation before the next move. We indeed
got a pullback into the moving average which is where we should start to see
some action on the lower timeframes.
Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the pair pulled
back to retest the bottom trendline of the falling wedge pattern
where we can also find the confluence of the
38.2% Fibonacci retracement level
and the previous swing low level. This is where the sellers should step in with
a defined risk above the resistance to position for a drop into new lows. The
buyers, on the other hand, will want to see the price breaking higher to
invalidate the bearish setup and position for a rally into the top trendline
around the 1.0850 level.
EURUSD Technical Analysis –
1 hour Timeframe
On the 1 hour chart, we can see that the
price rejected the key resistance zone around the 1.0785 level and it’s now at
the upward trendline where we have also the red 21 moving average for
confluence. This is where the buyers are likely to step in with a defined risk
below the trendline to position for a break above the resistance. The sellers,
on the other hand, will want to see the price breaking lower to increase the
bearish bets into new lows.
Today we will see the latest US Jobless Claims
figures which is going to be last notable event of the week.
This article was written by FL Contributors at www.forexlive.com.
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