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James Hyerczyk
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EUR/USD

The Euro jumped to its highest level against the U.S. Dollar since March 23 on Tuesday after data showed inflation making strong gains in March, though the rise was not expected to alter the Federal Reserve’s commitment to keeping interest rates at rock-bottom levels for years to come.

In other news, German economic sentiment deteriorated in April, survey results from the ZEW – Leibniz Centre for European Economic Research showed on Tuesday.

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The ZEW Indicator of Economic Sentiment fell 5.9 points to 70.7 points. This was the first time that the indicator has experienced a drop since November 2020 and was well below economists’ forecast of 79.0.

Economic confidence in the Euro Area also weakened in April. The corresponding index declined 7.7 points to 66.3. By contrast, the indicator for the current economic situation climbed 4.3 points to a level of minus 65.5 points.

At 14:27 GMT, the EUR/USD is trading 1.1939, up 0.0047 or +0.39%.

The consumer price index jumped 0.6% last month, the largest gain since August 2012, after rising 0.4% in February, the Labor Department said on Tuesday. Excluding the volatile food and energy components, the CPI rose 0.3%. The so-called core CPI nudged up 0.1% in February.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through 1.1989 will change the main trend to up. A move through 1.1990 will reaffirm the uptrend.

A trade through 1.1704 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the upside momentum. A trade through 1.1738 will change the minor trend to down.

The main range is 1.1603 to 1.2349. The EUR/USD is currently testing its retracement zone at 1.1888 to 1.1976. This zone is controlling the near-term direction of the EUR/USD.

The minor range is 1.1989 to 1.1704. Its 50% level at 1.1847 is also potential support.

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Daily Swing Chart Technical Forecast

The direction of the EUR/USD into the close on Tuesday is likely to be determined by trader reaction to 1.1888.

Bullish Scenario

A sustained move over 1.1888 will indicate the presence of buyers. Taking out the minor top at 1.1947 will indicate the buying is getting stronger. This could trigger a surge into a potential resistance cluster at 1.1976, 1.1989 and 1.1990.

Bearish Scenario

A sustained move under 1.1888 will signal the presence of sellers with 1.1847 the next likely target.

Side Notes

Closing under 1.1911 will form a closing price reversal top on the daily chart. If confirmed, this could trigger the start of a 2 to 3 day correction.

For a look at all of today’s economic events, check out our economic calendar.
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