- The dollar rose on Friday due to a positive employment report.
- The US reported an additional 303K jobs in March and a drop in the unemployment rate.
- The European Central Bank will meet on Thursday this week.
An early session downturn pointed to a bearish tilt in the EUR/USD outlook, with the dollar standing resolute in anticipation of this week’s inflation data. At the same time, investors were gearing up for the European Central Bank meeting later in the week.
–Are you interested in learning more about buying NFT tokens? Check our detailed guide-
The dollar surged on Friday due to a positive employment report. However, it ended last week lower after a mixed set of data. Meanwhile, rate-cut bets fluctuated as investors kept readjusting according to incoming data.
US service activity data at the start of last week gave the impression that the economy was slowing down. Consequently, traders thought this would also lower inflation. However, this view changed when the US reported an additional 303K jobs in March and a drop in the unemployment rate. This was a sign that demand in the labor market was still high.
Therefore, there is a higher risk that inflation will spike if the Fed starts cutting interest rates too soon. Investors will now focus on inflation figures coming on Wednesday. A hotter-than-expected report would likely lead to a more hawkish outlook for the Fed.
The European Central Bank will meet on Thursday this week. Traders expect the central bank to hold rates and signal the first cut in June. Unlike the Fed, ECB policymakers are more confident that inflation is heading for the 2% target. This increases the chance that the ECB will cut rates before the Fed.
EUR/USD key events today
It will be a slow start to the week for the EUR/USD pair as neither the Eurozone nor the US will release any key reports.
EUR/USD technical outlook: Price retreats from trendline barrier
On the charts, the EUR/USD price is falling after meeting a strong resistance trendline at the 1.0875 level. However, indicators on the chart point to a bullish bias. The 30-SMA is pointing upward and sits below the price, showing an uptrend. At the same time, the RSI trades above 50 in bullish territory.
–Are you interested in learning more about British Trade Platform Review? Check our detailed guide-
Therefore, if the price respects the SMA as support, it will rise to retest the resistance trendline. On the other hand, if bears are ready to take over, the price will break below the SMA and the 1.0800 key support.
Looking to trade forex now? Invest at eToro!
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Share
Saqib Iqbal
