EURUSD – Up
Event to watch out for today:
15:00 EET. USD – Fed Board of Governors Chairman Jerome Powell to deliver a speech
EURUSD:
EUR/USD retreats to the 1.0860 area in the early hours of Asian trading on Friday. The decline of the main pair is supported by the strengthening of the US dollar and rising US Treasury bond yields. Traders are expecting the speech of Fed Chairman Powell.
On Wednesday, the US Fed decided to keep the benchmark overnight lending rate in the range of 5.25% to 5.5%. Fed Chairman Jerome Powell did not disclose the timing of the rate cut, but he expects the interest rate to be lowered by the end of this year. According to the CME FedWatch Tool, futures markets are pricing in an 80% probability that the Fed will begin cutting rates at its June meeting.
As for data, the S&P Global Composite PMI for U.S. business activity came in at 52.2 in March versus 52.5 previously. In addition, the manufacturing PMI rose to 52.5 in March from 52.2 in February, above market expectations of 51.7. The PMI for services fell to 51.7 in March from the previous reading of 52.3, which was weaker than the estimate of 52.0.
The latest purchasing managers‘ index survey from HCOB on Thursday showed that the euro area manufacturing PMI came in at 45.7 in March versus 46.5 previously, worse than the consensus forecast of 47.0. Meanwhile, the services PMI improved to 51.1 in March from 50.2 in February, beating the estimate of 50.5. The Eurozone composite PMI rose to 49.9 in March against 49.7 expectations and 46.3 in February.
Going forward, traders will keep an eye on Fed Chair Powell and Barr’s speeches on Friday. Next week will see the release of German retail sales data for February and US gross domestic product (GDP) for the fourth quarter (Q4). These events may give a clear direction to the Euro to Dollar pair.
Trading recommendation: Trade with buy orders when reaching from the price 1.0860. Sell up to the price level of 1.0810.
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