EURUSD: FOMC rate decisionThe week of macro data in the US started on Tuesday, with Jobs openings data. As per posted data, there have been 7.192M jobs open in March, which was below market expectation of 7,48M. The GDP Growth rate for the Q1 was standing at -0,3% for the quarter, which came as a surprise to the market, which was expecting to see the figure of +0,3%. Analysts are noting that this drop in economic output represents reflection of trade tariffs of the US Administration. The week-end brought the PCE data for March, which was closely watched by market participants, as this indicator represents Fed's favourite inflation indicator. As per published data, the PCE Price index reached 0% in March for the month, and 2,3% on a yearly basis. Figures were in line with market estimates. At the same time, core PCE was also at the level of 0%, beating market estimates of 0,1%. Personal Income in March was increased by 0,5%, while Personal Spending was higher by 0,7%. The ISM Manufacturing PMI in April was standing at 48,7, a bit higher from the forecasted 48. The Non-farm payrolls in April were increased by 177K, which was significantly above the market forecast of 130K. The Unemployment rate was without change from the previous month, at 4,2%.
The GfK Consumer Confidence in May reached the level of -20,6, much better than forecasted -26. The Retail Sales in Germany dropped by -0,2% in March for the month, bringing the total figure to 2,2% on a yearly basis. The slowdown in retail sales was higher from market consensus of 3,2% on a yearly basis. The Unemployment rate in Germany remained stable at 6,3% in April and without change from the previous month. The GDP Growth rate in Germany for Q1 reached 0,2% for the quarter, while it stands at -0,2% compared to the previous year. Both figures were in line with market estimates. At the same time, the GDP Growth rate in the Euro Zone reached the level of 0,4% for Q1 and 1,2% on a yearly basis. The GDP growth rate for the Euro Zone beat market expectations of 0,2% for the quarter and 1,0% for the year. Preliminary inflation rate in Germany in April was 0,4% for the month and 2,1% on a yearly basis. The Inflation rate in the Euro Zone preliminary in April was at the level of 2,2%, while the unemployment rate was steady at the level of 6,2%
The eurusd currency pair was mostly under sentiment of the US jobs data and consequently, its impact on the Fed rate decision in the coming period. In this sense, the US Dollar gained during the week, reaching its highest level at 1,1296 against euro as of the end of the week. The RSI started its move aways from the overbought market side, ending the week at the level of 56. It still does not represent the clear sign that the market is headed toward the oversold market side. The MA50 continues to diverge from MA200, after two lines made a cross, some three weeks ago.
The week ahead is going to be a very important one, considering the Fed's rate decision on Wednesday. Prior and during this day, some increased market nervousness and volatility might be quite possible. Previously, the market was testing the 1,1460, historically important resistance level. There has not been enough market strength for this level to be breached, in which sense, the market reverted a bit toward the downside. Still, the support level at 1,12 has not been tested during the previous week. The 1,13 level historically is not significant, in which sense, it should not be expected that the market will spend too much time around this level. As per current charts, there is higher probability for the 1,12 level, which could easily be the next stop for the eurusd pair. At the same time, there is some probability that the market might return toward 1,1460 to test it for one more time. Charts are not pointing toward the potential of higher grounds, at this moment.
Important news to watch during the week ahead are:
EUR: Retail Sales for March in the EuroZone, Balance of trade in Germany in March, Industrial Production in Germany in March.
USD: ISM Services PMI for April, FOMC Meeting and Interest Rate Decision will be held on Wednesday, May 7th, after which the Fed will held a press conference.
