Euro Price Forecast: Wait & See for EUR/USD, US CPI – DailyFX

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.
Recent Market News Headlines
Free Guide
Introduction to Forex News Trading
Recent Trading Strategies Headlines
Free Guide
The Fundamentals of Range Trading
Recent Currencies Headlines
Recent Commodities Headlines
Recent Stocks Headlines
Recent Cryptocurrencies Headlines
Free Guide
How to Use IG Client Sentiment in Your Trading
Trading Tools
Rates
Live forex rates at a glance
Earnings Calendar
Keep track of companies that are about to announce their earnings
Sentiment
Discover who is going long and short
DNA FX
Check what kind of trader you are
Economic Calendar
Explore key global events on the horizon
Live Chart
Latest price data across forex and major assets
Support & Resistance
View S&R levels for forex, commodities and indices
View All Tools
Economic Calendar
Free Trading Guides
Forex for Beginners
Traits of Successful Traders
Cryptocurrency Trading
Notify me about
H
M
L

Note: Low and High figures are for the trading day.
Note: Low and High figures are for the trading day.
Note: Low and High figures are for the trading day.
Note: Low and High figures are for the trading day.
Note: Low and High figures are for the trading day.
Note: Low and High figures are for the trading day.
The euro is trading cautiously this morning which is to be expected as markets prepare for the upcoming US CPI report (see economic calendar below). There has been little follow through from the recent SVB and Signature collapse today but the Federal Reserve and European Central Bank (ECB)’s dovish repricing has now shifted so significantly that a inflation miss could really drive this narrative to fruition and possibly see a Fed rate pause or cut in the March meeting. Generally, the Fed stops hiking rates when conditions are poor, exposing high beta FX currencies to downside risk while the US dollar’s safe-haven allure comes into play. In short, if this is the Fed’s last interest rate hike, history suggests being short the USD could be an unwise decision.
Trade Smarter – Sign up for the DailyFX Newsletter
Receive timely and compelling market commentary from the DailyFX team
EUR/USD ECONOMIC CALENDAR
Source: DailyFX economic calendar
As mentioned above, the ECB rate probabilities (refer to table below) have been significantly repriced as well which has limited EUR upside and now challenges the almost certain 50bps rate hike that was assured by ECB President Christine Lagarde.
ECB INTEREST RATE PROBABILITIES
Source: Refinitiv
The trading day will close out with the Fed’s Bowman’s address and it will be interesting to get the perspective from a Fed official who may reflect the overall thoughts of the Fed itself.
EUR/USD DAILY CHART
Chart prepared by Warren Venketas, IG
Daily EUR/USD price action has the dollar stronger this morning against most G10 currencies now hovering around the 1.0700 psychological resistance level/50-day MA (yellow). There is unlikely to be any significant movement between now and the US CPI release with no real directional bias evident. The Relative Strength Index (RSI) indicates no momentum preference to neither bulls nor bears thus highlighting the importance of US inflation and markets current cautious approach.
shows
Resistance levels:
Support levels:
IGCS shows retail traders are currently SHORT on EUR/USD, with 53% of traders currently holding short positions (as of this writing). At DailyFX we typically take a contrarian view to crowd sentiment; however, due to recent changes in long and short-term we arrive at short-term downside disposition.
Contact and followWarrenon Twitter:@WVenketas
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
DISCLOSURES
Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors. We advise you to carefully consider whether trading is appropriate for you based on your personal circumstances. Forex trading involves risk. Losses can exceed deposits. We recommend that you seek independent advice and ensure you fully understand the risks involved before trading.

FX Publications Inc., abbreviated herein as FXP, (d.b.a DailyFX) is no longer a registered Introducing Broker with the Commodity Futures Trading Commission and is no longer a Member of the National Futures Association in the U.S. Any and all information provided by FXP is not intended for use by U.S. residents or individuals domiciled in the U.S. Information presented by FXP should be construed as market commentary, merely observing economical, political and market conditions. This information is made available for informational purposes only. It is not a solicitation or a recommendation to trade derivatives contracts or securities and should not be construed or interpreted as financial advice. Any examples given are provided for illustrative purposes only and no representation is being made that any person will, or is likely to, achieve profits or losses similar to those examples. FXP is not responsible for any trading decisions taken by persons not intended to view this material. Registered Address: 251 Little Falls Drive, Wilmington, DE 19808. FX Publications Inc is a subsidiary of IG US Holdings, Inc (a company registered in Delaware under number 4456365).
From December 19th, 2022, this website is no longer intended for residents of the United States.
Content on this site is not a solicitation to trade or open an account with any US-based brokerage or trading firm

source