With the ECB meeting just two days away, all eyes are on the euro’s direction as it shows resilience against further declines

With the ECB meeting just two days away, all eyes are on the euro’s direction as it shows resilience against further declines

03.05.2023

In yesterday’s U.S. currency markets, the dollar traded in a tight range against the euro after the U.S. March manufacturing new orders report, released yesterday, came in at 0.9%—exceeding the previous reading of -0.7% and beating the market forecast of 0.8%. The EUR/USD pair traded within a range of 1.0942 to 1.1007 as it sought direction, remaining range-bound around the 20-period moving average on the 4-hour chart.We will be watching closely to see if today’s FOMC meeting provides a clear direction for the EUR/USD pair.

European currencies rose against the pound after the Eurozone’s April consumer price index, released yesterday, showed an increase from 6.9% in the previous month to 7.0%. The euro/pound pair rose from 0.8764 to 0.8824, breaking above the 200-period simple moving average (SMA) on the hourly chart. Since the euro/pound pair appears to be moving toward the upper boundary of its weekly uptrend line, it will be worth watching whether the euro remains firm heading into the weekend.

Today’s economic indicators include Turkey’s Producer Price Index and Consumer Price Index at 4:00 PM, the Eurozone’s employment statistics at 6:00 PM, the U.S. MBA Mortgage Applications Index at 8:00 PM, the U.S. ADP Employment Report at 9:15 PM, the U.S. PMI at 10:45 PM, the U.S. ISM Non-Manufacturing Index at 11:00 PM,23:30: U.S. weekly crude oil inventories; 27:00: U.S. FOMC policy rate decision and statement; and 27:30: U.S. Fed Chair Powell’s press conference. Ahead of the ECB meeting the day after tomorrow, we will be watching the direction of the euro, which has shown resilience on the downside.