The ECB may soon consider reducing interest rates.

The Euro remains at the level of 0.92 against the US dollar, as the dollar strengthened following economic data releases from the United States earlier this week. Investors are closely watching for potential monetary policy changes, with Jerome Powell suggesting that the central bank is likely to start lowering interest rates within this year. On the ECB front, there is an expectation of a rate cut in the coming months due to lower than expected inflation rates.

The European Central Bank decided to keep interest rates at 4.5% during its meeting in March, as policymakers remain concerned about the possibility of increasing inflation. However, there are also some worries about an impending economic slowdown. Deposit rates remain at a high of 4%, while the ECB forecasts average inflation rates to be 2.3% in 2024, 2.1% in 2025, and 2.0% in 2026. Additionally, economic growth for 2024 is projected to decrease to 0.6% due to anticipated economic slowdown.

Unemployment rates in the Eurozone have decreased to a record low of 6.5% in February 2024, matching market expectations. However, youth unemployment remains unchanged at 14.6% for the fourth consecutive month. Spain continues to have the highest unemployment rate at 11.5%, followed by Italy at 7.5% and France at 7.4%, while Germany has the lowest rate at 3.2%.

Eurozone inflation has decreased to 2.4% year-on-year in March, marking a 28-month low and lower than market expectations of 2.6%. Core inflation, excluding volatile food and energy prices, has also decreased to 2.9%. The decrease in inflation is attributed to lower energy prices, while food and beverage prices have increased only slightly.

Bank lending to households in the Eurozone increased by 0.3% year-on-year to 6.87 trillion euros in February, marking the slowest rate of increase since 2015. This indicates that the tightened monetary policy is impacting consumer and business demand directly. However, lending to companies increased by only 0.4% to 5.13 trillion euros.

Techical analysis data (5H)

Resistance: 0.9266, 0.9281, 0.9305

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 0.9203 - 0.9227 but cannot break the support at 0.9227, you may set a TP at approximately 0.9281 and SL at around 0.9187 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 0.9266 - 0.9281, you may set a TP at approximately 0.9305 and SL at around 0.9203 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 0.9266 - 0.9281 but cannot break the resistance at 0.9266, you may set a TP at approximately 0.9203 and SL at around 0.9305 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 0.9203 - 0.9227, you may set a TP at approximately 0.9187 and SL at around 0.9281 or according to your acceptable risk.

Pivot point April 5, 2024 09:29 PM. GMT+7