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EURUSD: Potential ABC Pattern in short Term

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From a technical point of view, the pair could trigger a technical bounce following a potential ABC Pattern as shown on the chart. Having said that, at the moment the trend is bearish, but as long as the Price Actio remains above the previous low a bullish corrective structure should appear in the short term. Target around 1.10 area.

Trade with care
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註釋

🔴 The US dollar was mixed against its major trading partners early Monday — up versus the yen and Canadian dollar, down versus the euro and pound — as markets begin to prepare for semiannual testimony from Federal Reserve Chairman Jerome Powell on Wednesday and Thursday and the release of the February employment report Friday.
The week starts light with no major US data scheduled, but Philadelphia Fed President Patrick Harker is set to speak at 11:00 am ET. Harker next votes on the Federal Open Market Committee in 2026. Tuesday's slate of releases includes weekly Redbook same store sales and the Institute for Supply Management's services reading for February. Besides Powell's appearance, Wednesday's highlights will be the release of ADP private payrolls for February, job openings data for January and the Federal Reserve's Beige Book.
Challenger layoffs data for February, weekly jobless claims, and revised productivity for Q4 will be the main releases Thursday, along with Powell's second day of testimony. Friday's employment report will be the data highlight of the week after a stronger-than-expected performance in the previous month. Fed officials will be on the speaking circuit again this week before Saturday, when the 'quiet period' ahead of the March 19-20 Federal Open Market Committee meeting begins.

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🔴 The European Central Bank's new macro forecasts on Thursday will likely be key for the euro, and a sharp cut in inflation projections could weaken the currency, Matthew Ryan, head of market strategy at global financial services firm Ebury says in a note. "A sharp downward revision to the inflation forecasts, in particular, could drag the common currency lower, as this would solidify bets in favor of a June interest rate cut," he says. The analysts expects ECB President Christine Lagarde to largely reiterate her message from the previous meeting, and probably to refrain from providing any clear forward guidance on rates

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🔴 The dollar weakens as Chair Powell's opening remarks in Congress reinforces the Fed's reliance on data, while the Bank of Canada sounds less dovish than expected. The Canadian central bank held interest rates at 5% and said it was premature to consider rate cuts. Powell, in turn, indicated cuts in the U.S. are possible this year, while warning against cutting too soon or too late.

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📊 The European Central Bank’s Today meeting is likely to be a subdued affair, with markets widely expecting interest rates to remain unchanged for the fourth consecutive gathering. For this reason, investors should closely monitor President Lagarde’s press conference – her statements may provide valuable insights into the monetary policy outlook. Lagarde is likely to embrace a neutral stance, refraining from sending signals that could inadvertently create unrealistic expectations in either direction. Although disappointing growth data over the past couple of months may argue for a more dovish position, policymakers may opt for caution in the face of stalled progress on disinflation. To provide some context, January’s CPI in the Eurozone topped estimates, reinforcing the argument that consumer prices are not yet on a sustained downward trend, with rapid wage growth keeping service sector inflation stickier than anticipated. Against this backdrop, the ECB will avoid any commitment to a pre-set course that could raise premature market hopes, stressing that decisions will be data-dependent. In terms of potential scenarios for the euro, any indication that the ECB’s easing measures are not imminent and could be delayed to the latter half of the year could spark a hawkish repricing of interest rate expectations. This would be bullish for the common currency. Conversely, any hint of potential early rate cuts could elicit an opposite response, weighing on the euro.

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📊 Well, we have eliminated the first two risk factors (Powell and ECB), the last hurdle is NFP (will be released today). The setup seems correct, and we don't need to make any changes at the moment.

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🔴 The euro could rise against the dollar if February U.S. jobs data at 1330 GMT are on the weak side, says Stefan Mellin, chief analyst in FX strategy at Danske Bank Research, in a note. "If our expectation of a softer U.S. labor market holds true--we forecast non-farm payrolls at 180k alongside average hourly earnings at 0.2% m/m--we could see EUR/USD rise further in the very near term," he says in a note. Analysts in The Wall Street Journal's poll expect payrolls to rise by 198,000, compared with a 353,000 increase in January. EUR/USD is flat at 1.0939, having hit a 7-week high around 1.0957 in overnight trade, according to FactSet.

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🔴 The U.S. dollar held steady against a handful of rival currencies on Wednesday, as traders weighed what impact hotter-than-expected inflation data could have on chances of an interest rate cut at the Federal Reserve's June meeting.
The U.S. consumer price index (CPI) increased solidly in February, beating forecasts and suggesting some stickiness in inflation. Although the CPI rose 0.4% in February in line with forecasts, a 3.2% year-on-year gain came in just ahead of an expected 3.1% increase. Core figures also topped estimates. That has left analysts wondering whether the Fed will have sufficient data to justify more than a couple of rate cuts all year. Still, market expectations for rate cuts to begin at the Fed's June meeting have eased only a touch to about a 67% likelihood versus 71% earlier in the week, according to the CME Group's FedWatch Tool. "(Fed Chair Jerome) Powell might now regret speaking of cuts during his testimony last week, as I suspect it explains why Fed Fund futures are still pricing in a June cut," said Matt Simpson, senior market analyst at City Index. "As the U.S. dollar handed back most of its post-CPI gains, I suspect the rebound in the U.S. yield curve provides the more accurate picture; a June cut is less likely."

註釋

📈 The U.S. dollar index held steady on Wednesday as traders shrugged off hotter-than-expected U.S. inflation and still expected a Federal Reserve interest rate cut in June. The U.S. consumer price index (CPI) increased solidly in February, beating forecasts and suggesting some stickiness in inflation. Although the CPI rose 0.4% in February in line with forecasts, a 3.2% year-on-year gain came in just ahead of an expected 3.1% increase. Core figures also topped estimates. That has left analysts wondering whether the Fed will be able to justify more than a couple of rate cuts all year. Markets see almost no chance of a Fed cut later this month, but expectations for rate cuts in June have eased only a touch to about a 67% likelihood versus 71% earlier in the week, according to the CME Group's FedWatch Tool.