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EURUSD Stabilizes Amid Sluggish US Economic Data and ECB’s Inflation Battle

The [[EUR/USD]] remained steady at 1.0894 after rising more than 0.5% on Monday, but encountered resistance as bullish momentum waned.

Arslan Butt•Tuesday, April 4, 2023•1 min read
The EUR/USD remained steady at 1.0894 after rising more than 0.5% on Monday, but encountered resistance as bullish momentum waned. Lackluster U.S. economic data on Monday put pressure on the dollar, allowing the euro to rally significantly.

The ISM survey revealed on Monday that manufacturing activity in March dropped to its lowest level in almost three years, as new orders continued to shrink. For the first time since 2009, all subcomponents of the manufacturing PMI were below the 50-mark threshold, resulting in a weaker US Dollar.

In other developments, market participants anticipate the European Central Bank (ECB) will continue to increase interest rates in the upcoming months to address inflation. Data released last Friday indicated a rise in core price growth in the eurozone, while core inflation in the US came in slightly below expectations at 4.6%.

In March, ECB President Christine Lagarde stated that the central bank is committed to bringing inflation back under control without making “trade-offs,” despite recent banking disruptions and the risk of a recession. Furthermore, the OPEC+ group’s decision to cut additional production has reignited inflation concerns, causing oil benchmarks to soar by 6% on Monday.


EUR/USD Technical Outlook:

The EUR/USD pair experienced minor declines yesterday, testing the EMA50 as the stochastic indicator displayed increasing positive momentum, which could potentially drive the price to resume its primary bullish trend, targeting 1.1030 as the next level.
Consequently, our bullish forecast will remain valid for the near future, with the caveat that breaking below 1.0845 could push the price to test the 1.0745 area before attempting to rise again.
The projected trading range for today is between 1.0800 support and 1.0970 resistance.
ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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