Will the euro, which has been weakening ahead of the ECB's policy rate decision, show signs of resilience?

Will the euro, which has been weakening ahead of the ECB's policy rate decision, show signs of resilience?

11.04.2024

In the previous day’s U.S. currency trading, the U.S. dollar emerged as the strongest currency during U.S. trading hours as U.S. Treasury yields rose following the March U.S. CPI report, which came in higher than market expectations.The EUR/USD pair fell by about 130 pips from 1.0866 to 1.0728. It broke through the -3σ line of the 4-hour Bollinger Bands. On the daily chart, the decline has brought the price down to the level of the recent low, so we need to carefully assess whether a rebound will occur or if the price will break below this level.

Ahead of today’s ECB policy rate announcement, the euro is falling against the yen. This movement contrasts with the rise in the USD/JPY pair, with the euro dropping from 164.980 to 163.904. Both the 4-hour and daily charts show lower highs. While the market expects the ECB to keep its policy rate unchanged at 4.50% today, we will be watching closely to see if the euro continues to weaken ahead of the announcement.

Today, Japan’s money supply will be released at 8:50, the Philippines’ trade balance at 10:00, China’s producer price index and consumer price index at 10:30, and Mexico’s industrial production and Brazil’s retail sales at 21:00.at 9:15 PM, the ECB interest rate decision and statement; at 9:30 PM, U.S. initial jobless claims and the U.S. Producer Price Index; at 9:45 PM, a press conference by ECB President Lagarde; at 11:00 PM, remarks by U.S. Richmond Fed President Barkin; and at 2:00 AM, a U.S. 30-year Treasury auction.We will carefully assess whether the euro, which has been weakening ahead of the ECB policy rate decision, will show any resilience.