Welcome to a new trading week.
From a fundamental perspective, trading might be in quiet waters at the beginning of this week but towards the end of the week we have two high-importance data releases and events.
The European Central Bank decision will take center stage on Thursday. Most action will come from the commentary by President Christine Lagarde. Markets currently expect the ECB to cut interest rates in April, but Lagarde warned that’s too early, pointing to a summer rate cut instead. While traders hope for a timetable of when to expect the first cut, this ECB meeting will likely be too soon to hope for a strong guidance. If Lagarde is however successful in dampening rate cut expectations, the euro could briefly spark higher.
On Friday, the core U.S. PCE index will be important in shaping expectations for Federal Reserve rate cuts.
Looking at the technical picture, both EUR/USD and GBP/USD remain stuck in broad ranges. As long as currencies are struggling for momentum, traders are advised to focus on range trading and breakout levels.
EUR/USD – Watch out for breakouts above 1.10 or below 1.08.
GBP/USD – Sideways range is intact. Sustained breakouts above 1.28 or below 1.25 will be of interest.
DAX – We will focus on a bullish break above 16820 in order to try another push for 17000. Remaining above 16300 will favor bullish action.
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