Superior broker technology provider since 2010
+1 (315) 675 1086 | Sales@YourOwnBrokerage.com

Slowly Approaches Make or Break Price


The main catalyst for the EUR/USD was the latest inflation data published on Wednesday.

  • Buy the EUR/USD pair and set a take-profit at 1.0410.
  • Add a stop-loss at 1.0780.
  • Timeline: 1-2 days.
  • Set a sell-stop at 1.0880 and a take-profit at 1.0750.
  • Add a stop-loss at 1.0950.

The EUR/USD rallied to the highest point since February after the US published March’s inflation numbers. It jumped to a high of 1.100, which was ~15% above the lowest point in 2022. It also rose after the latest Federal Reserve minutes.

The main catalyst for the EUR/USD was the latest inflation data published on Wednesday. According to the Bureau of Labor Statistics, the numbers revealed that consumer prices were still dropping, signaling that the Fed’s actions to tame inflation were working.

The headline consumer price index dropped from 0.4% in February to 0.1% in March. That was a bigger decline than the median estimate of 0.2%. On a year-on-year basis, inflation fell to 5.0%, the lowest level since 2021.

The closely-watched core inflation also dropped from the previous month to 0.4%. But it inched upwards slightly to 5.6%. Therefore, these numbers mean that the Federal Reserve will likely hike interest rates in May of this year. Most economists expect a 0.25% increase followed by a strategic pause.

The EUR/USD pair also reacted to the latest Fed minutes. In it, Fed officials said that they believe that the banking crisis will likely lead the US to a mild recession this year. The concern is that more regional banks will start boosting their balance sheets and reducing lending. The statement said:

“The staff’s projection at the time of the March meeting included a mild recession starting later this year, with a recovery over the subsequent two years.”

 Therefore, fears of a recession, coupled with falling recession means that the Fed will likely find it difficult to tighten further. It also raise the possibility of a rate cut in the fourth quarter or in 2024.

The key economic numbers to watch on Thursday will be inflation figures from Germany and Ireland. The US will also publish the latest producer price index numbers.

The EUR/USD pair has been in a bullish trend in the past few months and is now approaching the important resistance level at 1.1030, the highest point in February. It has jumped above the ascending trendline shown in orange and the 50-day moving average. The MACD and other oscillators have continued rising.

Therefore, the pair will likely continue rising in the coming days but this view will be confirmed if it moves above 1.0300. This price is the upper side of the double-top. A move above it will open the possibility of the pair rising above the resistance at 1.0500.

EUR/USD

Leave a Reply

Your email address will not be published. Required fields are marked *

YourOwnBrokerage is a leading Technology & Business Consulting firm with a specialized focus in Fintech industry.


RISK WARNING: Trading products are highly speculative in nature and carries a significant level of risk which may not be suitable for all investors. Please ensure you fully understand the risks involved and only invest money you can afford to lose. Seek advice from an independent adviser if at all unsure as to the suitability of investing in such instruments.


The content of this website must not be construed as personal advice. We recommend that you seek advice from an independent financial advisor.


The information on this website is not directed to residents of certain jurisdictions where such distribution or use would be contrary to local law or regulation.



© 2009 - 2024 YourOwnBrokerage.com. All Rights Reserved.