EU set up looking at a OB and a imbalance. We have a lot of news coming up EUR/USD is trading in a narrow range ahead of the US Consumer Price Index data for March.EUR/USD could see a lift in volatility from the CPI data if it deviates significantly from expectations.
Economists estimate that the data will show prices in the US to have risen by 3.4% Year-over-Year in March and 3.7% YoY for core goods, which excludes volatile food and energy prices.
Results in line with expectations would still indicate an inflation rate well above the Federal Reserve’s (Fed) 2.0% target. A greater decline would be required before the Fed is likely to bring down interest rates from their current 5.5% level.
In contrast to the Fed, the European Central Bank (ECB) is seen as more likely to cut interest rates earlier amid more subdued growth and inflation expectations.
For EUR/USD, the maintenance of higher interest rates in the US compared to the Eurozone is a bearish factor. This is because relatively higher interest attracts foreign capital inflows, favoring the US Dollar in this case.
Economists estimate that the data will show prices in the US to have risen by 3.4% Year-over-Year in March and 3.7% YoY for core goods, which excludes volatile food and energy prices.
Results in line with expectations would still indicate an inflation rate well above the Federal Reserve’s (Fed) 2.0% target. A greater decline would be required before the Fed is likely to bring down interest rates from their current 5.5% level.
In contrast to the Fed, the European Central Bank (ECB) is seen as more likely to cut interest rates earlier amid more subdued growth and inflation expectations.
For EUR/USD, the maintenance of higher interest rates in the US compared to the Eurozone is a bearish factor. This is because relatively higher interest attracts foreign capital inflows, favoring the US Dollar in this case.