EURUSD: FOMC week
The inflation in the US continues to be persistent, putting into question promised three rate cuts during the course of this year. Released data on the core Personal Consumption Expenditures Price index show an increase in March of 2.8% on a yearly basis, which was slightly above market estimate of 2.6%. The PCE on a yearly basis was standing at 2.7%, again modestly higher from 2.6% expected by the market. Personal income was up by 0.5% in March on a monthly basis, while personal spending was higher by 0.8% in March, and again, missed market estimates at 0.6%. As per CME Group FedWatch gauge, the market is currently estimating two rate cuts with a 44% probability rate.
As for other indicators published for the US, Durable Goods Orders were higher by 2.6% in March from the previous month and modestly above market estimates of 2.5%. The first estimate of the GDP Growth Rate for the first quarter of this year completely missed market estimates with a level of 1.6% compared to 2.5% expected by the market. Michigan Consumer Sentiment final for April was a bit decreased to the level of 77.2, from 77.8 estimated by the market.
HCOB Manufacturing PMI Flash for April in Germany was standing at 42.2 in line with the market estimate. The Ifo Business Climate for Germany in April was modestly increased to the level of 89.4, from 88.9 expected by the market. GfK Consumer Confidence in Germany for May stands at -24.2 modestly better from market estimate of -25.9.
The currency pair started the previous week around the level of 1.062. During the whole week the market was oriented toward the upside, where the highest level reached was 1.075. However, the currency pair is ending the week at 1.069. The 1.067 resistance line has been tested and clearly breached during the week; however, the next resistance at 1.08 has not been reached. This leaves some space for the currency pair to test this level in the week ahead. Moving averages of 50 and 200 days since the end of March are moving as one line, leaving no indication whether the cross actually occurred or not. Such a situation is not quite frequent on charts, but it occurs from time to time.
For the week ahead it should be considered that the FOMC meeting is scheduled for May 1st. This day might bring high volatility on markets, so some stronger moves in eurusd might be possible after the meeting. As previously noted, there is a high probability that eurusd will test the next resistance line at 1.08. Some higher levels could occur but with quite low probability. On the opposite side, the currency pair might test 1.07 level, eventually 1.067 for one more time, but it is not so likely at this moment on charts.
Important news to watch during the week ahead are:
Euro: Inflation Rate preliminary for April in Germany and Euro Zone, Unemployment rate in Germany in April, GDP Growth Rate flash for Q1 for Germany and in Euro Zone,
USD: CB Consumer Confidence in April, ISM Manufacturing PMI in April, FOMC Meeting and rate decision, Non-farm Payrolls in April, Unemployment Rate in April, ISM Services PMI in April
As for other indicators published for the US, Durable Goods Orders were higher by 2.6% in March from the previous month and modestly above market estimates of 2.5%. The first estimate of the GDP Growth Rate for the first quarter of this year completely missed market estimates with a level of 1.6% compared to 2.5% expected by the market. Michigan Consumer Sentiment final for April was a bit decreased to the level of 77.2, from 77.8 estimated by the market.
HCOB Manufacturing PMI Flash for April in Germany was standing at 42.2 in line with the market estimate. The Ifo Business Climate for Germany in April was modestly increased to the level of 89.4, from 88.9 expected by the market. GfK Consumer Confidence in Germany for May stands at -24.2 modestly better from market estimate of -25.9.
The currency pair started the previous week around the level of 1.062. During the whole week the market was oriented toward the upside, where the highest level reached was 1.075. However, the currency pair is ending the week at 1.069. The 1.067 resistance line has been tested and clearly breached during the week; however, the next resistance at 1.08 has not been reached. This leaves some space for the currency pair to test this level in the week ahead. Moving averages of 50 and 200 days since the end of March are moving as one line, leaving no indication whether the cross actually occurred or not. Such a situation is not quite frequent on charts, but it occurs from time to time.
For the week ahead it should be considered that the FOMC meeting is scheduled for May 1st. This day might bring high volatility on markets, so some stronger moves in eurusd might be possible after the meeting. As previously noted, there is a high probability that eurusd will test the next resistance line at 1.08. Some higher levels could occur but with quite low probability. On the opposite side, the currency pair might test 1.07 level, eventually 1.067 for one more time, but it is not so likely at this moment on charts.
Important news to watch during the week ahead are:
Euro: Inflation Rate preliminary for April in Germany and Euro Zone, Unemployment rate in Germany in April, GDP Growth Rate flash for Q1 for Germany and in Euro Zone,
USD: CB Consumer Confidence in April, ISM Manufacturing PMI in April, FOMC Meeting and rate decision, Non-farm Payrolls in April, Unemployment Rate in April, ISM Services PMI in April
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