• The Fed left interest rates unchanged as
  expected at the last meeting 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 US CPI beat
  expectations for the second consecutive month with the disinflationary trend
  reversing.
• The US PPI beat
  expectations across the board by a big margin.
• The US Initial Claims beat
  expectations while Continuing Claims missed. Overall, the data remains steady.
• 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 Retail Sales missed
  expectations across the board by a big margin.
• The market now 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 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 Services side with the measure jumping back into expansion while
  the Manufacturing one missed dragged lower by Germany’s performance.
• 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 June.

EURUSD Technical Analysis –
Daily Timeframe

On the
daily chart, we can see that EURUSD broke through the key trendline and the
red 21 moving average and
extended the rally into the 1.09 handle. This is where we can expect the
sellers to step in with a defined risk above the resistance to position for a
drop into the lows. The buyers, on the other hand, will want to see the price
breaking higher to increase the bullish bets into the 1.10 handle.

EURUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see more clearly the
breakout of the key resistance zone
around the 1.08 handle. The price pulled back at some point to retest the resistance turned support and
extended the rally into the 1.09 handle. From a risk management perspective,
the buyers will now have a much better risk to reward setup around the upward
trendline where they will also find the red 21 moving average for confluence. 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 lows.

EURUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the latest
leg higher diverged with
the MACD which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, it might be a signal for a pullback into the trendline.

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