By Ion Jauregui - ActivTrades Analyst
The EUR/USD trades cautiously on Tuesday, in a context marked by the release of key data that could define its direction in the coming days. The pair is trading slightly lower by 0.09%, reflecting investors' uncertainty ahead of the Eurozone Consumer Price Index (CPI) and manufacturing PMIs in Europe and the United States.
Eurozone CPI under the spotlight
The market expects March CPI in the Eurozone to have risen by 2.2% y/y, one tenth less than in February, while core inflation could come in at 2.5%, also one tenth below the previous figure. A lower-than-expected figure could reinforce expectations of a more moderate stance by the European Central Bank (ECB), which would put further pressure on the euro against the dollar.
PMI and economic outlook
Manufacturing PMIs will also be released today in Spain, Italy, France, Germany, the UK, the Eurozone and the US. These data will offer insight into the health of the manufacturing sector and could influence perceptions of economic strength in both regions. If the data in Europe shows weakness and the US data beats expectations, the dollar could strengthen further, extending the downward pressure on the EURUSD.
Technical Analysis
The EURUSD is currently climbing in price since April 26th, supporting its climb at higher supports at each time 1.07364, 1.07649, 1.07913 its current POC, and today it has broken out generating support near 1.08 dollars per euro. If this price holds as support, we will see an increase in the value of the euro against the dollar. The 1-day chart shows an upward expansion of the averages, but if we go to 4 hours this expansion is much more timid. And in 1 hour this expansion is non-existent and the three averages are about to make a possible confluence of averages. In the Asian day there has been some correction with volume which could mark, together with the RSI currently at 43.10%, a recovery of the price. It is likely that in the news hours these prices will soar throughout the day, especially at the beginning of the American session that will put on the table the US data, which after the consequences of the tariff pressure are generating undesirable effects towards the United States, with its consequent weakening. If the U.S. data shows strength, the next area of movement for the dollar would be its second support indicated at 1.07649.
In this environment, investors will continue to watch bond market signals and central bankers' speeches for clues on future monetary policy decisions that could impact the EURUSD price. EURUSD remains in a key zone, with support at 1.08, awaiting inflation and PMI data. If European data disappoints and the US shows strength, the dollar could gain ground. The US session will set the direction of the pair.
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
The EUR/USD trades cautiously on Tuesday, in a context marked by the release of key data that could define its direction in the coming days. The pair is trading slightly lower by 0.09%, reflecting investors' uncertainty ahead of the Eurozone Consumer Price Index (CPI) and manufacturing PMIs in Europe and the United States.
Eurozone CPI under the spotlight
The market expects March CPI in the Eurozone to have risen by 2.2% y/y, one tenth less than in February, while core inflation could come in at 2.5%, also one tenth below the previous figure. A lower-than-expected figure could reinforce expectations of a more moderate stance by the European Central Bank (ECB), which would put further pressure on the euro against the dollar.
PMI and economic outlook
Manufacturing PMIs will also be released today in Spain, Italy, France, Germany, the UK, the Eurozone and the US. These data will offer insight into the health of the manufacturing sector and could influence perceptions of economic strength in both regions. If the data in Europe shows weakness and the US data beats expectations, the dollar could strengthen further, extending the downward pressure on the EURUSD.
Technical Analysis
The EURUSD is currently climbing in price since April 26th, supporting its climb at higher supports at each time 1.07364, 1.07649, 1.07913 its current POC, and today it has broken out generating support near 1.08 dollars per euro. If this price holds as support, we will see an increase in the value of the euro against the dollar. The 1-day chart shows an upward expansion of the averages, but if we go to 4 hours this expansion is much more timid. And in 1 hour this expansion is non-existent and the three averages are about to make a possible confluence of averages. In the Asian day there has been some correction with volume which could mark, together with the RSI currently at 43.10%, a recovery of the price. It is likely that in the news hours these prices will soar throughout the day, especially at the beginning of the American session that will put on the table the US data, which after the consequences of the tariff pressure are generating undesirable effects towards the United States, with its consequent weakening. If the U.S. data shows strength, the next area of movement for the dollar would be its second support indicated at 1.07649.
In this environment, investors will continue to watch bond market signals and central bankers' speeches for clues on future monetary policy decisions that could impact the EURUSD price. EURUSD remains in a key zone, with support at 1.08, awaiting inflation and PMI data. If European data disappoints and the US shows strength, the dollar could gain ground. The US session will set the direction of the pair.
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.