EUR/USD Down After Inflation Surge in USA, Eurozone & Ahead of US NFPs

  • EURUSD
    (${instrument.percentChange}%)

Inflation Surge

The latest data for the Fed's preferred measure of Inflation were released on Thursday, showing a 5.4% jump year-over-year in Core Personal Consumption Expenditures (PCE) in March, marking the highest level since April 1983.

The war in Ukraine and Western sanctions against Russia put upward pressure in the already high post-pandemic consumer prices. This led the Fed to hike interest rates last month, for the first time since 2018.

Earlier today, we got an update from Eurozone, with the preliminary reading of the Consumer Price Index (CPI) for March. Headline Preliminary CPI climbed 7.5% year-over-year in March, compared to final 5.9% year-over-year reading in February.

The European Central Bank (ECB) is far behind its US counterpart in policy normalization, but last month it announced a faster tapering of its QE, which is now expected to conclude in the third quarter - potentially opening the door for a rate increase within the year.

EUR/USD Analysis

The pair dropped on Thursday and today it stays on the back foot, rejecting the 50% Fibonacci of the 2022 High/Low drop. It also returns back below the EMA200 and the Relative Strength Index (RSI) crosses below the 50 mark. These factors maintain near-term risk tilted to the downside, although moves below 1.0901 will likely require a catalyst.

Why Trade with FXCM

Commission free with fast, efficient execution.

Despite that, the common currency tries for weekly gains thanks to the solid start to it and another test of 1.1150 would not bee surprising, but we remain cautious about its ability to push for and beyond 1.1233.

Markets now await the US Jobs Report (12:30 GMT), which has the potential to increase volatility and affect the pair's trajectory.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

Disclosure

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.

Risk Warning: Our service includes products that are traded on margin and carry a risk of losses exceeding deposited funds, if you are a professional client. The products may not be suitable for all investors. Please ensure that you fully understand the risks involved.

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}