EURUSD TECHS: Bullish Trend Structure
- RES 4: 1.1608 High Nov 9 2021
- RES 3: 1.1555 1.382 proj of the Feb 28 - Mar 18 - 27 price swing
- RES 2: 1.1495 High Feb 10 2022
- RES 1: 1.1473 High Apr 11
- PRICE: 1.1323 @ 15:54 BST Apr 15
- SUP 1: 1.1144 High Apr 3 and a recent breakout level
- SUP 2: 1.0972 20-day EMA
- SUP 3: 1.0788 50-day EMA and a short-term pivot level
- SUP 4: 1.0733 Low Mar 27 and a key short-term support
A bull cycle in EURUSD remains intact and the pair is holding on to the bulk of its recent gains. The breach last week of 1.1144, the Apr 3 high and bull trigger, confirmed a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Sights are on 1.1555 next, a Fibonacci projection. Initial support lies at the 1.1144 breakout level. Key support is unchanged at the 20-day EMA, at 1.0972.
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FED: March Economic Projections: Higher Inflation, Weaker Growth, Same Rates
The MNI Markets Team’s expectations for the updated Economic Projections in the March SEP are below.
- The unemployment rate is likely to rise slightly for 2025 alongside a downgrade in GDP growth, while the 2025 core and headline PCE inflation projections are set to rise again. Changes to later years will likely be limited, however.
- More detail on the shift in Fed funds rate medians is in our meeting preview - we will add more color next week.
FED: Market Pricing Nearly 3 2025 Cuts As Conditions Tighten
Amid rising government policy uncertainty, sentiment among businesses and consumers has fallen sharply since the start of the year, while equities and the dollar have reversed their post-election rise. Overall, financial conditions have tightened, even if stress is not yet mounting, e.g. no major widening of credit spreads (the accompanying chart shows the Fed’s financial conditions impulse index but only through January).
- Combined with growth fears, this has affected expectations for the Fed’s rate path, with around 18bp more cuts expected in 2025 compared with what was seen after the January FOMC. 65bp of cuts are priced for the year as a whole. 2025 cut pricing reached 71bp before the February inflation data and 76bp before the February payrolls report.
- A rate cut is seen with near zero probability for March’s meeting, but the first full cut is just about priced for June, with a second nearly priced by September.
- Chair Powell has no reason to endorse or refute these expectations – he’s likely to be happy with a press conference that ends with little discernable change in pricing.
CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
- CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
