The EUR/USD pair struggles to sustain above the round-level resistance of 1.0700 in Monday’s European session. The major currency pair exhibits caution ahead of the release of key economic indicators in the Eurozone, such as preliminary Eurozone Q1 Gross Domestic Product (GDP) and the Consumer Price Index (CPI) data for April, which will be published on Tuesday. Eurozone’s economic data will influence speculation about interest rate cuts by the European Central Bank (ECB). Currently, investors’ expectations that the ECB will start to cut its Main Refinancing Operations Rate from the June meeting strengthened as policymakers see them as reasonable.Last week, Banque de France Governor and ECB Council member François Villeroy de Galhau said there is no need to wait much longer to start interest rate cuts if other things remain constant. Villeroy expects that energy prices are unlikely to rise further despite Middle East tensions and, hence, should not impact the ECB’s plans to pivot to interest rate cuts starting in June.While a rate-cut move in the June meeting is widely expected, there is uncertainty over whether the ECB will extend the rate-tightening campaign. ECB policymakers share different opinions on that as Villeroy said last week: “June rate cuts should be followed by further cuts, at a pragmatic pace.” On the contrary, ECB policymaker and Bundesbank Chief Joachim Nagel said last week that a June interest rate cut may not necessarily be followed up by a series of rate cuts. Nagel remains worried about higher service inflation due to strong wage growth. He is not fully convinced that inflation will actually return to target in a timely and sustained manner. In Monday’s session, investors will focus on the German preliminary inflation data for April, which will be published at 12:00 GMT. The annual Harmonized Index of Consumer Prices (HICP) is expected to have grown steadily by 2.3%. Daily digest market movers: EUR/USD is off from daily high ahead of German data
Technical Analysis: EUR/USD aims for sustainability above 1.0700 The EUR/USD attempts to establish firm footing above the 1.0700 hurdle. The shared currency pair extends its recovery from 1.0600 to 1.0700, but the near-term outlook is still uncertain. The 20-day Exponential Moving Average (EMA) near 1.0720 remains a major barricade for the Euro bulls. The 200-day EMA near 1.0800 is declining, suggesting that the long-term appeal is bearish. The 14-period Relative Strength Index (RSI) shifts into the 40.00-60.00 range, indicating a consolidation ahead. The holistic view of the EUR/USD pair indicates a sharp volatility contraction due to a Symmetrical Triangle formation on a daily timeframe. The upward-sloping border of the triangle pattern is plotted from the October 3 low at 1.0448, and the downward-sloping border is placed from the December 28 high around 1.1140.More By This Author:USD/CAD Price Analysis: Consolidates Around 1.3650 Ahead Of Fed’s Preferred Inflation Gauge GBP/JPY Extends Winning Spell To 196.00 After BoJ Keeps Interest Rates Unchanged USD/CAD Bounces Back To 1.3700 After Weak Canadian Retail Sales Data
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