EUR/USD Upbeat as Markets Gear for Another US Inflation Update


EUR/USD Analysis

Last week we got a series of poor jobs data from the United States, such the first sub-10 million reading in Jobs opening in over a year and the weak growth in private payrolls. These show that the Fed's massive tightening may have started to make a dent in the tight labor market, but Friday's Employment report was overall strong. The economy added a robust 236,000 jobs in March and unemployment ticked down to 3.5%, close to its five-decades low.

Now focus will shift to Wednesday's CPI update, with recent inflation figures showing a moderation in headline figures, although core readings appear more sticky. We also expect the accounts of the last Fed policy meeting on the same day. It will be interesting to see if the unanimous decision to slow the pace of tightening came easy or was contentious and if there are any diverging views on how the banking turmoil will affect the economy and the monetary policy path.

The conservative shift of the US central bank following the SVB collapse and the divergence with its European counterpart, continue to underpin EUR/USD, which is upbeat today. It comes from a six-week profitable streak, and looks like it has the room to challenge 1.1067 and set new 2023 high, although we are cautious about further gains towards and beyond 1.1223.

On the other hand, EUR/USD made a poor start to the week and there is risk for a test of the EMA200 (1.0790). Daily closes below it would be required for the upside momentum to pause, but the downside seems well protected. The daily Ichimokou cloud is located right below, while the 200Days EMA and the ascending trend line the 2022 lows converge at around 1.0600.

Nikos Tzabouras

Senior Financial Editorial Writer

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.

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