Dollar Climbs After Trump-Zelenskiy Meeting Ends Early
EUR/USD Back Into Support After Triple Top. Non-Farm Payrolls Next.
The main economic release of last week was the U.S. inflation data in the form of the PCE Price Index; however, this was mainly overshadowed by geopolitical developments. The Euro dropped, allowing the US Dollar to climb after a meeting between Trump and Zelenskiy did not go as planned.
The meeting was meant to be an important step towards the end of the Russia – Ukraine war but was cut short by differences in opinion between Trump and Zelenskiy and resulted in the latter leaving the White House earlier than anticipated.
Economic Calendar Highlights
Monday at 10:00 am GMT we will take a look at European inflation with the release of the Eurozone Core CPI Flash Estimate. The U.S. Manufacturing PMI will be released later in the day, at 3:00 pm GMT. It is not known as a major market mover but it can affect the US Dollar.
The U.S. Services PMI will be released Wednesday at 3:00 pm GMT and the ADP Non-Farm Employment Change will be released earlier in the day, at 1:15 pm GMT. The ADP version of the NFP tries to mimic the government-issued report that comes out 2 days later but its impact is a lot lower.
The European Central Bank (ECB) is expected to cut the rate from the current 2.90% to 2.65%. The announcement will be made Thursday at 1:15 pm GMT and will be followed at 1:45 pm GMT by the ECB Press Conference where ECB President Lagarde will deliver a prepared statement and then will answer journalists’ questions.
The main event of the week will be the release of the U.S. Non-Farm Payrolls (NFP) report, scheduled for Friday at 1:30 pm GMT. Job creation is closely watched by the Fed when deciding where to set the rates and the NFP release is always a major volatility generator.
Technical Outlook – EUR/USD
The pair is currently trading very close to the support at 1.0350 after another failed attempt to break the 1.0500 resistance. Although the downtrend was overextended and it looked like a stronger rally would follow, now the price created a triple top at 1.0500. The last two tops are very close to one another but we can still call this a triple top.
The next important technical hurdle is the 50-day Moving Average, which was already tested and a small bearish candle closed below it. However, we cannot quite call this a true break of the line, especially because 1.0350 support is still intact and very close to the current price.
If we see a break of the two mentioned support elements (the 50 MA and 1.0350), the price is likely to descend to the lowest point of the downtrend, in the 1.0220 zone. This week there are major releases for both currencies in the pair, thus the technical side may play second fiddle this week.
