Anna 
During European trading hours on Thursday, the EUR/USD pair breached the critical 1.0800 threshold, plummeting to a fresh low for March at 1.0774. Despite a modest rebound from this level, the pair maintained a negative bias, settling around the 1.0790 mark. The US Dollar capitalized on hawkish remarks from Federal Reserve Governor Chris Waller, affirming the central bank’s cautious stance towards rate adjustments.
Conversely, the Euro faced headwinds from lackluster domestic data, notably with Germany reporting a substantial 2.7% year-on-year decline in Retail Sales for February, significantly worse than the anticipated 0.8% decrease. Comments from European Central Bank (ECB) Board member Fabio Panetta, emphasizing the diminishing risks to price stability in the Eurozone, failed to make a notable impact. Panetta reiterated the conditions necessary for initiating monetary policy easing, aligning with previous hints from several ECB officials regarding a potential rate cut in June under President Christine Lagarde’s leadership.
Ahead of Wall Street’s opening, the US Dollar experienced some retracement as positive US data bolstered risk sentiment. The final revision of the Q4 Gross Domestic Product (GDP) saw an upward adjustment to 3.4% from the previous estimate of 3.2%. Moreover, Initial Jobless Claims for the week ended March 22 beat expectations at 210K, while the March Michigan Consumer Sentiment Index was revised upwards to 79.4, surpassing the preliminary estimate of 76.5. Additionally, February’s Pending Home Sales recorded a 1.6% month-on-month increase, exceeding forecasts.
As markets wind down for the Easter Holiday on Friday, attention will turn to the US core Personal Consumption Expenditures (PCE) Price Index, a key inflation metric expected to remain stable at 2.8% year over year.
Short-term Technical Outlook for EUR/USD
The EUR/USD pair currently resides below the 61.8% Fibonacci retracement level of the 1.0694/1.0981 rally at 1.0803, indicating a downside bias. On the daily chart, the pair remains below all its moving averages, with the 200 Simple Moving Average (SMA) trending flat, converging with the next Fibonacci resistance level at 1.0835. Technical indicators continue their downward trajectory within negative levels, suggesting potential for further declines.
In the short term, the 4-hour chart aligns with a bearish outlook, as the pair remains below all its moving averages, encountering resistance around the bearish 20 SMA. The longer-term moving averages maintain a neutral stance above the shorter one. Furthermore, technical indicators show continued downside momentum within negative territory, indicating heightened selling pressure.
