Fundamental
Overview
Yesterday, the US PPI report came in higher than expected but the
focus was on the details that feed into the Core PCE index, which is what the
Fed focuses on. Those details were all very soft and helped to bring the early
estimates down to more benign levels. In fact, the Core PCE Y/Y is now
projected to fall to 2.6% vs. 2.8% prior. That’s good news for the Fed.
The US Dollar fell across
the board as a result and eventually the bearish momentum increased
substantially in the evening as the Trump’s tariffs saga came to an end. In
fact, the US President announced his reciprocal tariffs that could go into effect in April
but the overall tone of it wasn’t aggressive and sounded a lot like the start
of a negotiating process to bring tariffs to a fair level for everyone.
On the EUR side, it’s been
all about the US Dollar softness and with the markets now less concerned about
tariffs, the other major currencies got the green light to appreciate against
the greenback.
On the Eurozone side, the
news of a peace deal in the Russia-Ukraine war continue to gather momentum with
a very positive call recently between Trump and Putin where the US President
got even invited in Moscow. A peace deal will be positive for the economy all
else being equal.
EURUSD Technical
Analysis – Daily Timeframe
EURUSD Daily
On the daily chart, we can
see that the EURUSD broke above the key resistance around the 1.0447 level. The
buyers piled in to position for a rally into the next resistance around the
1.0523 level. That’s where we can expect the sellers to step in with a defined
risk above it to target a pullback into the 1.0447 level.
EURUSD Technical
Analysis – 4 hour Timeframe
EURUSD 4 hour
On the 4 hour chart, we can
see more clearly the recent price action with the USD losing ground first on
the benign US PPI and later on the Trump’s reciprocal tariffs announcement. If
we retest the 1.0447 level, we can expect the buyers to step in with a defined
risk below the level to position for the rally into the 1.0532 level next. The
sellers, on the other hand, will look for a break lower to extend the pullback
into the 1.0350 level.
EURUSD Technical
Analysis – 1 hour Timeframe
EURUSD 1 hour
On the 1 hour chart, we can
see that we have now an upward trendline defining the bullish momentum. If we
get a pullback into it, we can expect the buyers to lean on the trendline to
push into further highs, while the sellers will look for a break lower to
increase the bearish bets into the 1.0350 level. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we conclude the week with the US
Retail Sales.
