EURUSD stabilized near the upper boundary of the two-week correction channel as the dollar is steady ahead of a speech by Federal Reserve (Fed) Governor Jerome Powell. The pair will also be directly influenced by the European Central Bank's (ECB) rate decision on Thursday, and U.S. employment data due on Friday.
According to traders' forecasts, the Fed won’t start easing monetary policy until it receives sufficient evidence of a steady decline in inflation in the country. This is reported by Reuters.
Stronger-than-expected growth in U.S. consumer prices at the beginning of the year won’t significantly change Powell's outlook, said Carol Kong, a currency strategist at the Commonwealth Bank of Australia.
According to the CME FedWatch tool, markets have priced in about a 60% chance of a rate cut in June.
Meanwhile, the euro was flat as traders braced for the ECB's meeting. The central bank is expected to leave rates at a record 4,5%. The most important market question is the timing and size of the central bank's rate cut. Traders expect its reduction by 90 basis points in 2024, and the first step is likely to occur in June, according to CME FedWatch.
EURUSD quotes have gone beyond the downtrend on the H4 timeframe. In terms of wave analysis, the price is forming the third ascending wave. Breaking through the top of the first wave at the level of 1.0885 will strengthen the upward movement of the price. The Bulls Power (standard values) indicates high buying sentiment.
Signal:
The short-term outlook for EURUSD is to buy.
The target is at the level of 1.1000.
Part of the profit could be fixed near the level of 1.0915.
The Stop loss could be placed near the level of 1.0760.
The bullish trend is of a short-term nature, so it is suggested to limit the trading volume to no more than 2% of your capital.
This content is for informational purposes only and is not intended to be investing advice.
