Eurusd rises to 1.11888 as U.S. sees improved fiscal metrics and easing inflation

EURUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	2.18%	238.5 Pips
Week to-date	2.4%	262.7 Pips
April	3.71%	401.6 Pips

Upcoming key events (London Time)

Fri 10:45 AM EUR European Central Bank’s President Christine Lagarde speech
Fri 01:30 PM USD PPI excluding Food and Energy sectors (12-mth)

What happened lately

In the United States, the Monthly Treasury Budget Statement showed improvement with the deficit shrinking to $161 billion in March from $307 billion in February. This indicates a reduction in government spending or an increase in revenue, reflecting positively on the fiscal management. Additionally, inflation rates in the U.S. have shown a decline. Excluding food and energy, the Consumer Price Index (CPI) inflation rate fell to 2.8% in March from 3.1% in February, while the overall CPI inflation for the 12-month period in March decreased to 2.4% compared to 2.8% previously. This signals easing inflationary pressures, which may reduce the urgency for aggressive monetary tightening. Furthermore, the initial unemployment insurance claims increased slightly to 223K in early April from a previous 219K, indicating subtle job market fluctuations.

The recent data suggests a mixed economic picture for the U.S., with fiscal improvements and decreasing inflation counterbalanced by a slight uptick in unemployment claims. These developments have implications for currency movements, particularly the EURUSD exchange rate. The softer inflation figures could restrain the Federal Reserve’s appetite for raising interest rates aggressively, potentially weakening the dollar. Conversely, improvements in the fiscal position may lend some strength to the dollar. On the Eurozone front, European Central Bank President Christine Lagarde’s upcoming speech is a high-impact event that could sway market expectations regarding future monetary policy, thereby influencing the euro’s strength. Overall, the scenario seems to favor a stronger euro in comparison to a possibly weakening dollar, which aligns with the recent uptrend in EURUSD, pushing it higher to 1.11888. Market participants will closely watch these factors and upcoming events for cues on potential shifts in the currency pair.

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What can we expect from EURUSD today?

EURUSD on Thursday rose 2.18% to 1.11888. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for EURUSD looks bullish as the pair ended higher after Thursday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 1.13059 with break above could target R2 at 1.14231 or figure level area. While towards the downside, we are looking at daily low of 1.09426 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.12414 may suggest continuation after recent positive movement.

For the week to-date, take note that EURUSD is bullish as the pair continued to trade higher and is up by 2.4% over the past few days.

Key levels to watch out:

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