After the Fed interest rate decision the currency market remains under pressure of strong US Dollar: EUR/USD made a new low at 1.1935, GBP/USD made a new low at 1.3550 as well, but the USD/JPY has traded lower at 109.55. Asian equities were mostly lower with Hang Seng leading losses (-1.66%). US 10-year yields flat at 2.966%. Gold up by 0.3% to $1,308.82 and WTI oil is down by 0.15% to $67.83.
On Thursday 3rd of May, the event calendar is quite busy in important data releases. The Eurozone will post CPI Flash Estimate and PPI, the UK will post PMI Services data, Canda will issue Trade Balance data and the US will post ISM Non-Manufacturing PMI data, Unemployment Claims data, Prelim Unit Labor Costs data and Prelim Nonfarm Productivity data. Moreover, there is a speech from SNB Chairman Thomas Jordan scheduled later on the day as well.
EUR/USD analysis for 03/05/2018:
The main event today is the Eurozone flash inflation for April. The global investors expect it to remain at the 1.3% level from March and we project core inflation will decline back to 0.9%, due to Easter base effects from 2017 becoming a drag on services prices. A temporary increase in headline inflation in coming months is likely because of energy price inflation, although the underlying price pressure remains subdued going forward.
Let's now take a look at the EUR/USD technical picture in the H4 time frame. The market has hit and bounced from the 61% Fibo retracements at the level of 1.1935. The key intraday technical resistance is seen at the level of 1.2000 and 1.2035 and only a sustained breakout above this level would confirm the bottom is in place. Please notice the market conditions are extremely oversold and several bullish divergences are present at various time frames, which indicate the corrective pull-back is near.
