EUR/USD trades flat on Wednesday morning following CPI reports from both regions, which only brought volatility but not so much direction. Focus shifts to US retail sales to be published tomorrow.
Key Points
- Despite the news-induced volatility yesterday, the EUR/USD only gained 0.01% by the end of the trading day and is unchanged this morning.
- The US CPI data suggests that the Fed’s hawkish stance may continue. At the same time, comments from ECB officials suggest a cautious approach with a possibility of a rate cut.
- Investors will be looking to the US Core Retail Sales and Initial Jobless Claims report tomorrow for some direction.
EUR/USD Daily Price Analysis: 13/03/2024
Despite the very volatile day the pair had on Tuesday, the EUR/USD settled for a marginal 0.01% gain by the end of the trading day. Today, the pair has further gained by 0.4% and now trades at 1.09319.
On Tuesday, the pair got a significant volatility boost from the releases of US and German CPI data. While the German CPI data came in as forecasted, the US CPI data exceeded expectations at 3.2%, slightly higher than analysts’ expectations of 3.1%. This data allayed any concerns of near-term rate cuts, causing the US treasury yield to rise and thus benefiting the greenback.
In the Eurozone, though, things are a lot more dovish, judging from the remarks of ECB members. First, Francois Villeroy de Galhau, an ECB Governing Council member, remarked that a consensus had been reached in the ECB to start dropping interest rates as early as March. The Belgian Central Bank Governor also mentioned that the ECB may gamble with early rate cuts. The French Central Bank Governor said the rate cut is more likely to come in June than in April.
Investors will now turn their attention to Thursday’s Core Retail Sales and Initial Jobless Claims news release in the US.
Technically, the pair doesn’t look to have picked a long-term direction as the 200EMA flattens out. In the short term, though, the pair’s outlook is still bullish, judging from the price’s position relative to the 50 EMA.
EUR/USD Intraday Price Analysis – 13/03/2024
The Fibonacci retracement tool reveals an uptrend from the swing low of $1.07960 to the swing high of $1.09813. Using this tool, the price currently hangs between the 0.786 ($1.09416) Fib level and the 0.618 ($1.09105) Fib level. Any downward pressure may push the price to the 0.618 level and even below it.
A sustained downward pressure may further push the price to the 0.5 ($1.08887), 0.382 ($1.08668), and 0.236 ($1.08397) Fib levels may come into view.
For the price to make a bullish case, though, it’ll have to start with the 0.786 fib level. And if it’s able to surpass that, it’ll face a challenge clearing out the most recent swing high at 1.09813.
Key Economic Data for the EUR/USD Pair – 13/03/2024
An ECB supervisory board member has a testimony today, followed by the release of the US crude oil inventories later in the day. However, investors will likely be more interested in the US Core Retail Sales and Initial Jobless Claims news releases on Thursday. These may provide more insight into the Fed’s stance on interest rate cuts.
EUR/USD Key Fibonacci Price Levels 13/03/2024
Based on the 1hr chart, the key Fibonacci price levels for EUR/USD are these:
| Support | Resistance |
| $1.09105 | $1.09416 |
| $1.08887 | $1.09813 |
| $1.08668 | |
| $1.08397 | |
| $1.07960 |
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