After a brief uptick following the release of US PPI data and ECB President Lagarde’s press conference, the EURUSD pair has resumed its downward trajectory. Lagarde refrained from definitively signaling a June interest rate cut, emphasizing that the economic situations in the US and EU are distinct. This ambiguity has bolstered expectations among traders for a potential ECB rate cut preceding the Federal Reserve’s actions.
Currently, the EURUSD pair is testing the 61.8% retracement level from the low in October 2023 to the high in December 2023, standing at 1.07133. A breach below this level could lead traders to eye the 2024 low of 1.0694 set on February 14, followed by a zone spanning from 1.0655 to 1.0675. The failure to surpass the 1.07605 target post-PPI has generated selling pressure, reinforcing the bearish sentiment in the market.
The reluctance of the EURUSD pair to surpass key resistance levels accentuates the dominance of sellers in the current market environment. The intricacies of Lagarde’s statements regarding potential rate cuts have added an element of uncertainty, driving traders to closely monitor upcoming economic data releases and central bank decisions for further guidance on the pair’s future direction.