Economic Releases and the EUR/USD Exchange Rate
Fundamental Perspective
Any possible positive swings in the EUR/USD exchange rate have been constrained by the present market environment, which is defined by a risk-averse attitude. This comes before tomorrow’s anticipated releases of statistics on US inflation and the EU’s GDP.
Recently, the European Commission offered upbeat predictions for the EU economy. They said that the economy began 2023 in a stronger position than anticipated, and as a result, they increased their estimate of the Euro Area’s growth for the year to 0.9%. Contrarily, the Commission reduced its forecast for inflation, with the headline rate now expected to fall to 5.6% in 2023.
The future inflation prognosis has received praise, but the experts pointed out that rate increases after March will still rely on facts. The University of Michigan’s most recent preliminary consumer mood survey revealed an increase in one-year inflation forecasts, which increased to 4.2% from 3.9% in January.
Michelle Bowman, a policymaker at the Federal Reserve, is anticipated to use more hawkish language today, which might put some pressure on the EUR/USD exchange rate. However, it is predicted that until tomorrow’s publication of US inflation data and Euro Area GDP growth rate estimates, any significant swings in the pair would be put on hold.
Technical Prospects
Technically speaking, the recent breakthrough in EUR/USD from the ascending channel points to more downside for the exchange pair. The closing of the weekly candle provides more support for this notion by suggesting that the pair may see further losses.
Before resuming its downward trend, it’s probable that the exchange rate may go just a little bit higher, retesting the lower end of the ascending channel around 1.0745. The EUR/USD support levels are 1.0645 and lower at 1.0600.