Anna 
EUR/USD continued its downward trend, trading slightly lower in the lower 1.0600s on Wednesday, marking its sixth consecutive day of losses. The pair’s movement suggests caution among traders, with charts indicating entry into the oversold zone, possibly signaling the potential for an upward correction in the near future.
Key events influencing EUR/USD’s volatility on Wednesday include the release of the final estimates for Eurozone March inflation data and speeches by European Central Bank (ECB) officials. Inflation data plays a crucial role in the ECB’s interest rate decisions, which in turn impact FX markets.
The flash estimates for March showed a slight decline in the Harmonized Index of Consumer Prices (HICP) year-on-year, with the final estimates expected to confirm this trend. Any deviation from these estimates could lead to fluctuations in EUR/USD.
A lower-than-expected final estimate might reinforce expectations of an imminent interest rate cut by the ECB, likely in June, potentially depreciating the Euro and pushing EUR/USD lower. Conversely, an upward revision in HICP could raise doubts about the timing of a rate cut, strengthening the Euro and prompting a recovery in EUR/USD.
Speeches by key ECB members throughout the day, including ECB Executive Board Member Piero Cipollone, ECB Executive Board Member Isabel Schnabel, and President Christine Lagarde, could also influence the pair’s volatility. Lagarde’s recent remarks suggesting an impending rate cut, barring surprises, have further fueled expectations of monetary policy easing. Additionally, concerns over oil prices due to tensions in the Middle East have heightened the ECB’s focus on economic developments, adding to market uncertainty regarding EUR/USD’s direction.
