EUR/USD Price Forecast: Holds $1.0772 Amid Rate Cut Speculation
In the early hours of the Asian market, EUR/USD encountered resistance, trading around 1.0772, reflecting a slight decline of 0.19%. The currency pair reacted to Federal Reserve Chair Jerome Powell’s comments, which suggested a cautious approach to interest rate cuts. Powell indicated that a March rate reduction might be premature, aligning with the Federal Open Market Committee’s (FOMC) focus on ensuring inflation trends towards the 2% target before easing monetary policy.
Labor Statistics and Quantitative Tightening
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The US Bureau of Labor Statistics reported a robust increase in Nonfarm Payrolls, countering the assumption of an immediate need for rate cuts. The data underpin the dollar’s strength, with the jobless rate stable at 3.7% and wage growth showing resilience.
The Fed’s upcoming March meeting will further deliberate on the pace of quantitative tightening, potentially impacting the EUR/USD trajectory.
Economic Events Ahead
Looking ahead, the economic calendar is brimming with key data releases that could sway the pair. European trade balance figures and a suite of Services PMI readings will offer insights into the Eurozone’s economic health.
Additionally, investor confidence indicators and Producer Price Index (PPI) numbers await. On the dollar’s side, the ISM Services PMI will be particularly scrutinized to gauge sectoral health. These releases hold the potential to either bolster or weaken the common currency against the backdrop of the Fed’s monetary stance.
EUR/USD Price Forecast: Technical Outlook
The EUR/USD is currently navigating the confines of a downward channel, trading just above the pivot point at $1.0777. This level is crucial as it not only represents immediate support but also coincides with the lower boundary of the channel. The next support levels are likely found at $1.07443 and $1.07157, which could serve as potential turning points for the pair.
On the resistance side, the currency duo faces its first test at the channel’s upper edge, suggesting $1.08437 as the immediate hurdle. Successive resistance levels are anticipated at $1.08935 and further up, each marking past areas of contention that could impede bullish advances.
EUR/USD Live Chart
EUR/USD Price Chart
The Relative Strength Index (RSI) underscores the potential for a reversal, resting below the median line at 46.80. A recent bullish candlestick formation alongside this RSI level suggests that the bears may be losing their grip, with the possibility of a bullish resurgence if the pair sustains above the pivot point.
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