• 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
  cut.
• 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 CPI beat
  expectations for the second consecutive month with the disinflationary trend
  reversing.
• The US NFP report
  beat expectations across the board by a big margin.
• The ISM Manufacturing
  PMI
  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 June.

EUR

• 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 placing more weight on wage
  growth and data dependency.
• The market expects the ECB to cut rates in April.

EURUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that EURUSD dropped
back into the key support around
the 1.07 handle following the hot US CPI report. The price bounced as the
buyers stepped in again to position for a rally into the trendline
targeting a break above it. The sellers, on the other hand, will want to see
the price breaking lower to increase the bearish bets into the 1.05 handle
next.

EURUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the latest leg
lower diverged with the
MACD which is
generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, it might signal a correction all the way back to the
trendline where we have the confluence with the
1.08 handle. That’s where the sellers will likely step in more aggressively
with a defined risk above the trendline to position for a breakout below the
1.07 support.

EURUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price has been consolidating inside the 1.0723 and 1.0736 range. Today we have
some key economic releases and a break on either side supported by the data
should trigger a more sustained move in the direction of the breakout, so watch
out for that.

Upcoming Events

Today we will see the latest US Jobless Claims
figures and the US Retail Sales data, while tomorrow we conclude the week with
the US PPI and the University of Michigan Consumer Sentiment survey.

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