Chart of the day – EURUSD (03.04.2024)

Chart of the day – EURUSD (03.04.2024)
Chart of the day – EURUSD (03.04.2024)

Today, the Eurodollar saw increased volatility following the release of data from the Eurozone economy. The euro weakened after data indicated that euro zone preliminary CPI inflation for March was lower than expected at 2.4% versus 2.5% expected. Core CPI also came in below the 3% estimate and the unemployment rate rose 0.1% to 6.5%. Overall, the data suggests an economic slowdown in Europe, and dovish comments from the ECB’s Holzmann indicate that keeping the ECB deposit rate above 3% may prove too restrictive given the current economic climate. Data from the US continues to provide very strong results compared to the Eurozone, and today the gap is likely to widen as we learn ISM data on the services sector (16:00 CET) and the ADP report from the US private labor market (14 :15 CET). In both cases, the market expects slightly better values ​​than in February. A strong change in ADP employment and an ISM above 53 points could strengthen the dollar and put downward pressure on EUR/USD. Furthermore, 5 members of the Federal Reserve will speak today, including Jerome Powell (18:10 CET)

EURUSD (D1 range)

The Eurodollar slipped below the key support of SMA200 (red line), for the first time since August 2023. Real transaction volume shows higher selling activity and if the pair fails to break above 1.08 where now we can see the most important resistance zone (SMA200, trend line), the pair may even touch 1.06 levels. The pair is also trading in a potential bearish head and shoulders technical pattern, where a sustained loss of 1.08 could impose further pressure on the technical side. In an extreme scenario, even testing 1.02 is not out of the question, but a more severe recession in Europe would be key to realizing such a large decline, with the US economy still very solid and the Fed delaying policy cuts. taxi.

Source: xStation5

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