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  • Investors are expecting the US non-farm payrolls report on Friday.
  • Food inflation is still rising in Europe and may be the main cause of price increases.
  • The Eurozone’s Composite Purchasing Managers’ Index increased to a 10-month high.

Today’s EUR/USD forecast is slightly bearish. The dollar gained slightly on Thursday as it regained safe-haven appeal amid recession worries. However, the Greenback didn’t move much from a recent two-month low. Traders also assessed the potential effect of crucial US jobs data on Federal Reserve policy.

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The highly anticipated US non-farm payrolls report on Friday will come after dismal services sector data from the Institute for Supply Management (ISM), poor private employment data, and a slump in US March manufacturing activity at the beginning of the week.

Elsewhere, according to Philip Lane, head economist at the European Central Bank, food inflation is still rising in Europe and may be the main cause of current price increases.

Although energy prices helped to slow overall inflation last month significantly, underlying price growth continued to increase. This raised fears that rapid price growth might become sticky.

The Eurozone’s Composite Purchasing Managers’ Index from S&P Global, regarded as a reliable indicator of the state of the whole economy, increased to a 10-month high of 53.7 last month. This increased from 52.0 in February, shy of a 54.1 preliminary estimate.

March marked the third consecutive month above 50, dividing growth and contraction.

A Reuters poll predicted that the ECB would raise rates by 25bps at its May, June, and July meetings after delivering the anticipated 50 basis point increase last month.

EUR/USD key events today

Investors are awaiting more labor market data from the US. The initial jobless claims will show the previous week’s unemployment state.

EUR/USD technical forecast: Bears to strengthen below 1.0900

EUR/USD technical forecast
EUR/USD H4 forecast chart

The 4-hour chart shows EUR/USD trading at the 30-SMA with the RSI near the pivotal 50-level. When bulls finally broke above the 1.0900 key resistance level, they pushed the price to 1.0955. 

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However, bears returned with just as much strength to retest the 1.0900 key level. The price also retests the 30-SMA support and seems ready to break below. The bullish move will continue if the 30-SMA holds firm as support. Otherwise, bears will be eying lower support levels like 1.0751.

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