Technical Analysis – EURUSD plummets after US CPI and ECB decision
April 12, 2024 9:28 am
As US CPI comes hotter than expected EURUSD tumbles
After ECB interest rate decision EURUSD continues the fall
Where is the next stop for the pair?
How did EURUSD reacted after the US CPI release on Wednesday and the ECB interest rate decision on Thursday?
EURUSD fell more than 100 pips after the US CPI data
Since June 2023, both consumer price index (CPI) and producer prices have been relatively stable without significant changes. In addition, a crucial measure of the Consumer Price Index (CPI) for services surged to 4.8% in March, showing no signs of decreasing. The Federal Reserve has encountered persistent and troublesome challenges in managing inflation mostly due to the stubborn and difficult-to-control price pressures in the services sector.
The Federal Reserve’s favoured measure of inflation, known as the PCE measure, has seen more favorable growth. The core PCE price index, which is of great significance, decreased to 2.8% in February, marking its lowest level in almost three years.
Technically, after the US CPI release, EURUSDtumbled more than 100 pips, meeting the ascending trend line that is standing near the 1.0720 support level. The price dropped beneath the short-term simple moving averages (SMAs) in the daily timeframe, remaining within a symmetrical triangle. However, how did the pair react after the ECB announcement on Thursday?
ECB left interest rates unchanged with EURUSD continuing its negative move
As expected, the European Central Bank kept interest rates steady on Thursday, but it has provided further signs that it may soon start to decrease them.
The officials stated that they may consider lowering the existing degree of policy tightening if they become more certain that inflation is moving closer to their desired target. During the press conference, President Lagarde expressed that the decrease in inflation is providing reassurance, and some members of the board expressed confidence in reducing rates.
While she did not explicitly indicate a June rate cut, officials still expect a June interest rate reduction, as stated in a report released a few hours after her speech.
Since yesterday, EURUSDlost 0.8%, diving beneath the 1.0700 round number and creating a fresh five-month low near 1.0675. The price plunged below the ascending trend line, indicating a potential downside retracement with the next support level coming from 1.0655. Steeper decreases could open the way for the 1.0515 barricade, switching the longer-term timeframe to a more bearish one.
Looking at the technical oscillators, the RSI is approaching the 30 level with strong momentum, while the MACD is strengthening its negative momentum beneath its trigger and zero lines in the daily chart.
All in all, the pair has dived more than 1.7% over the last three days so far and any movements below 1.0655 could show some signs for more aggressive falls.
As US CPI comes hotter than expected EURUSD tumbles
After ECB interest rate decision EURUSD continues the fall
Where is the next stop for the pair?
How did EURUSD reacted after the US CPI release on Wednesday and the ECB interest rate decision on Thursday?
EURUSD fell more than 100 pips after the US CPI data
Since June 2023, both consumer price index (CPI) and producer prices have been relatively stable without significant changes. In addition, a crucial measure of the Consumer Price Index (CPI) for services surged to 4.8% in March, showing no signs of decreasing. The Federal Reserve has encountered persistent and troublesome challenges in managing inflation mostly due to the stubborn and difficult-to-control price pressures in the services sector.
The Federal Reserve’s favoured measure of inflation, known as the PCE measure, has seen more favorable growth. The core PCE price index, which is of great significance, decreased to 2.8% in February, marking its lowest level in almost three years.
Technically, after the US CPI release, EURUSD tumbled more than 100 pips, meeting the ascending trend line that is standing near the 1.0720 support level. The price dropped beneath the short-term simple moving averages (SMAs) in the daily timeframe, remaining within a symmetrical triangle. However, how did the pair react after the ECB announcement on Thursday?
ECB left interest rates unchanged with EURUSD continuing its negative move
As expected, the European Central Bank kept interest rates steady on Thursday, but it has provided further signs that it may soon start to decrease them.
The officials stated that they may consider lowering the existing degree of policy tightening if they become more certain that inflation is moving closer to their desired target. During the press conference, President Lagarde expressed that the decrease in inflation is providing reassurance, and some members of the board expressed confidence in reducing rates.
While she did not explicitly indicate a June rate cut, officials still expect a June interest rate reduction, as stated in a report released a few hours after her speech.
Since yesterday, EURUSD lost 0.8%, diving beneath the 1.0700 round number and creating a fresh five-month low near 1.0675. The price plunged below the ascending trend line, indicating a potential downside retracement with the next support level coming from 1.0655. Steeper decreases could open the way for the 1.0515 barricade, switching the longer-term timeframe to a more bearish one.
Looking at the technical oscillators, the RSI is approaching the 30 level with strong momentum, while the MACD is strengthening its negative momentum beneath its trigger and zero lines in the daily chart.
All in all, the pair has dived more than 1.7% over the last three days so far and any movements below 1.0655 could show some signs for more aggressive falls.
Related Posts: