EUR/USD: US Dollar gave back gains after US Jobs Report was released last Friday. The US Non-Farm Payrolls printed at 103K in March, missing expectations of 193K, it is fewest jobs since hurricanes in September. The jobless rate held steady at 4.1%, missing expectations for a further drop to 4.0%. The only good news from the jobs report is that; Average hourly earnings advanced 0.3% month-on-month in March, matching forecasts. That was higher than the 0.1% advance seen a month earlier.
Looking ahead, we will focus on US CPI Inflation and the FOMC meeting notes on Wednesday. In February, The US CPI rose to an annualized 2.2%, which is higher than the Fed’s target of 2.0%. The March's customer price index is expected to come out at 2.4%. On the other hand, Core CPI inflation is expected to rise to 2.1% from 1.8% a month earlier. Acceleration in headline inflation may prompt investors to price further rate hikes from Fed.
The FOMC meeting notes from the US will be a significant release for the FX market and this should give a more detailed explanation of March meeting. Federal Reserve hiked interest rates by 25 basis points and raised target interest rate to 1.75 - 1.50 percent in March, as expected. The Fed projected for two more rate hikes for 2018 and they said the inflation to move up in coming months, stabilize around 2%.
Moreover; The ECB March meeting minutes and German CPI figures will be followed closely by the investors in the upcoming week.
The EURUSD pair found buyers from the 1.2232 key support level after NFP. In this week, we will focus on the daily resistance level of 1.2314. As long as the price sustains below that level on a daily basis, the rise may be limited. In this case, we will see 1.2232 and 1.2171 as support levels again. On the other hand, if the price goes beyond 1.2314, the next resistance level can be found at 1.2384.
Support: 1.2232 – 1.2171 - 1.2109
Resistance 1.2314 - 1.2384 – 1.2465