US DOLLAR FORECAST – EUR/USD

• EUR/USD strikes with out directional conviction forward of subsequent week’s FOMC determination
• The Fed is seen retaining rates of interest regular, however there isn’t a consensus on steerage
• This text seems at EUR/USD’s technical outlook over the approaching buying and selling classes

Most Learn: US Greenback Soars on Inflation Dangers as Fed Looms; EUR/USD, GBP/USD, USD/JPY Setups

The U.S. greenback was broadly flat in opposition to the euro on Friday (EUR/USD 0.0% at 1.0885) after a powerful exhibiting within the earlier session, regardless of an uptick in U.S. Treasury yields, with many merchants opting to remain on the sidelines and keep away from giant directional bets forward of subsequent week’s Federal Reserve’s determination.

Supply: TradingView

Though the U.S. central financial institution is predicted to maintain its coverage settings unchanged at its March assembly, there isn’t a common consensus on what policymakers will say in regards to the outlook. For that reason, volatility is prone to speed up within the coming classes throughout belongings.

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When it comes to attainable eventualities, merchants shouldn’t be stunned if the FOMC adopts a barely extra hawkish stance in gentle of upside inflation dangers, which have clearly materialized within the newest CPI and PPI reviews launched a number of days in the past.

Whereas the Fed has said that it intends to start dialing again coverage restraint sooner or later in 2024, stalled progress on disinflation, coupled with financial resilience, may drive the establishment to delay the beginning of its easing cycle and sign fewer fee cuts for the interval.

Presently, markets are anticipating roughly three quarter-point fee reductions by means of yr’s finish. Ought to policymakers point out an intention to ship fewer cuts than at the moment priced in, we may see yields push larger throughout the curve, bolstering the U.S. greenback within the course of.

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EUR/USD FORECAST – TECHNICAL ANALYSIS

EUR/USD leveled off on Friday after falling sharply on Thursday, with costs hovering barely above help at 1.0875. If this ground holds within the coming days, patrons might slowly begin reentering the market once more, setting the stage for a transfer in direction of 1.0980. On additional energy, all eyes shall be on 1.1020.

On the flip facet, if technical help caves in, sellers might really feel emboldened to launch a bearish assault on 1.0850/1.0835, an space the place three important transferring averages intersect. Beneath this band, consideration shall be directed in direction of 1.0790 and 1.0725 thereafter.

EUR/USD PRICE ACTION CHART

EUR/USD Chart Created Utilizing TradingView