EUR/USD Posts Monthly Gain But Holds Below Critical 1.0900
The EUR/USD pair is closing March with a monthly gain following February’s decline, although the euro has been unable to hold above the 1.0900 critical level.
On the last trading day of the month, the pair pulled back and trimmed half of its weekly advance after inflation data was published on both sides of the Atlantic.
At the time of writing, EUR/USD is trading at the 1.0835 area, 0.61% below its opening price. Still, the pair posts weekly, monthly and quarterly gains of 0.74%, 2.52% and 1.31%, respectively.
Earlier in the session, the Eurozone reported consumer inflation data. The annual inflation rate, measured by the Harmonized Index of Consumer Prices (HICP), came in at 6.9% in March, below the consensus forecast of 7.1% and slowing from its previous figure of 8.5%. However, the core rate increased to 5.7% from 5.6% the previous month.
Across the pond, the U.S. Core Consumption Expenditures (PCE) Price Index – the Federal Reserve’s preferred inflation gauge – rose by 4.6% over the year to March, slightly below the forecast of 4.7%.
After the Q4 2022 Gross Domestic Product (GDP) growth was downwardly revised to 2.6% and the core PCE rate eased, the Fed may have more evidence that inflation is slowing down and economic activity is seeing some below-trend growth, which might boost expectations of a less aggressive Fed.
From a technical perspective, the EUR/USD maintains a short-term bullish bias according to indicators on the daily chart. From a wider perspective, the outlook is tilted to the upside on the weekly chart, although the bullish case is not that strong.
The EUR/USD pair needs to break above the 1.0900 level decisively, the 61.8% retracement of the May 2021 – September 2022 downfall, to improve the medium-term perspective, targeting February’s highs at the 1.1030 zone.
On the other hand, the critical support area is given by the 20-week SMA at the 1.0650 area. Loss of this level would deteriorate the euro’s perspective, exposing the 1.0500 zone.
On the last trading day of the month, the pair pulled back and trimmed half of its weekly advance after inflation data was published on both sides of the Atlantic.
At the time of writing, EUR/USD is trading at the 1.0835 area, 0.61% below its opening price. Still, the pair posts weekly, monthly and quarterly gains of 0.74%, 2.52% and 1.31%, respectively.
Earlier in the session, the Eurozone reported consumer inflation data. The annual inflation rate, measured by the Harmonized Index of Consumer Prices (HICP), came in at 6.9% in March, below the consensus forecast of 7.1% and slowing from its previous figure of 8.5%. However, the core rate increased to 5.7% from 5.6% the previous month.
Across the pond, the U.S. Core Consumption Expenditures (PCE) Price Index – the Federal Reserve’s preferred inflation gauge – rose by 4.6% over the year to March, slightly below the forecast of 4.7%.
After the Q4 2022 Gross Domestic Product (GDP) growth was downwardly revised to 2.6% and the core PCE rate eased, the Fed may have more evidence that inflation is slowing down and economic activity is seeing some below-trend growth, which might boost expectations of a less aggressive Fed.
From a technical perspective, the EUR/USD maintains a short-term bullish bias according to indicators on the daily chart. From a wider perspective, the outlook is tilted to the upside on the weekly chart, although the bullish case is not that strong.
The EUR/USD pair needs to break above the 1.0900 level decisively, the 61.8% retracement of the May 2021 – September 2022 downfall, to improve the medium-term perspective, targeting February’s highs at the 1.1030 zone.
On the other hand, the critical support area is given by the 20-week SMA at the 1.0650 area. Loss of this level would deteriorate the euro’s perspective, exposing the 1.0500 zone.