The EUR/USD fluctuated this Wednesday morning in anticipation of consumer inflation data and the upcoming US Federal Reserve (Fed) minutes. During that time, the EUR/USD was trading at 1.0850, up from this month’s low of 1.0725.
Today’s calendar has no important data scheduled from the euro zone. In Europe, the focus is on the possibility that the European Central Bank (ECB) will begin rate cuts before the Fed does. This is because inflation on the European continent is rapidly accelerating towards the ECB’s 2% target. After this week’s meeting, the ECB will signal to the markets what its next steps will be.
Meanwhile, the focus will be on the upcoming inflation data in the United States. Some market analysts expect the consumer price index (CPI) to increase by 0.3% in March, which means a year-on-year increase of 3.4%. Core inflation is estimated at 0.3% month-on-month and 3.7% year-on-year.
If these figures are correct, it means that inflation continues to be very high in the United States. It will also suggest that the period of disinflation may have ended. s a consequence, this would indicate that the Fed will keep interest rates unchanged for much longer. This stance will persist until there is convincing evidence that inflation is moving toward the central bank’s target range.
Another important piece of data that may affect the EUR/USD is the Fed minutes. These minutes will provide more insight into what the central bank officials discussed at their meeting last month.
Daily technical analysis EUR/USD April 10th
The EUR/USD has been in a consolidation phase over the past few days, this consolidation has been a downtrend although it has not reached the lows as it did on Monday. The pair is trading at 1.0855 above this month’s low of 1.0725. Also, on the daily chart, the pair is consolidating at the 50-day and 25-day Weighted Moving Averages (EMA).
This pair has moved towards the strong points, pivot and inverse of the Murrey Mathematical Lines, while the histogram of the Percentage Price Oscillator (PPO) has moved above the neutral point. The Relative Strength Index (RSI) likewise has moved above the neutral point.
And more importantly, it has entered a double-bottom pattern. The outlook is therefore bullish, and the next point to watch is at 1.0975, its March 8 high. A breakdown below 1.0725 support would signal further declines.
It is very likely that today’s events and the events to come this week will be an important catalyst for the pair to start trending higher and regain the ground it has lost in recent days. Everything will depend on what happens today and what this may tell us for the future of both the dollar and the euro.
