Euro Fell On Strong Dollar, Dovish ECB Outlook

Fundamental Analysis

* Dipping Euro: The Euro has slipped against the greenback from its weekly high following a buoyant USD supported by positive data and dovish signals from ECB. The US Census Bureau reported that Durable Goods Orders in February increased by 1.4% compared to the previous month, surpassing expectations of 1.1% growth and recovering from January’s decline of -0.9%. Core Durable Goods Orders also saw an uptick of 0.4% compared to the previous month, rebounding from -0.3% and exceeding the expected 0.4% consensus. On ECB front, ECB official Yannis Stoumaras suggested that there is widespread agreement regarding a potential rate reduction in June. Madis Muller echoed similar sentiments, hinting that the ECB is approaching a point where it could consider lowering interest rates.

Technical Analysis

* Technical Breakout: EUR/USD was traded lower following prior retracement from the resistance level 1.0860. MACD which illustrates diminishing bullish momentum coupled with bearish engulfing candlestick pattern suggest the pair to extend its loss further.

* Resistance And Targets: If the bearish momentum persists, there’s a strong likelihood that the price will decline towards the subsequent level 1.0800 and potentially breach below it. Conversely, if the price fails to break the level 1.0800, it may indicate a short-term technical correction and rebound towards the level 1.0860.

Understand how technical analysis can help you in this trading opportunity.

Potential Risks

Moving forward, traders will remain focused on various economic data from EU and US for more clues on potential rate cuts. The Eurozone docket includes multiple release of economic data from Spain, France and entire bloc while U.S will release GDP, unemployment claims and Fed’s preferred gauge for inflation which is the core PCE.

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Monitoring

Stay updated on U.S and EU data, ECB and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.