ECB expected to cut rates today

The ECB’s interest rate decision is set to occur later on today. The majority of economists are currently anticipating the bank to cut by 25 basis points, with EUR OIS currently implying a 93.9% probability for such a scenario to materialize. Thus, with the market all but expecting the bank to cut rates, we turn our attention to the bank’s accompanying statement and ECB President Lagarde’s press conference following the decision. We would not be surprised to see policymakers and ECB President Lagarde in her speech, highlighting the risks to the European economy as a result of the tariff ambitions being brought forth by the US. Moreover, with recent reports emerging from Bloomberg that the EU’s trade Chief Sefcovic left the trade meeting with his US counterparts with little clarity on the US’s stance, the ECB may be taking the recent developments into account. Essentially, the decision by the US to postpone their tariff implementations for 90 days may be seen as a positive sign that a trade deal might be struck, which in turn could ease recession and inflation worries and may thus allow the ECB to continue on their rate-cutting cycle. However, given that it is a 90-day reprieve, the ECB may remain skeptical and thus may require further time to see the “end” product. In conclusion, should the ECB showcase a willingness to cut rates should the need arise in the future, it may weigh on the EUR and vice versa. Over in Asia, we would like to highlight Japan’s CPI rates for March, which are set to be released in tomorrow’s Asian session. The current expectations are for the Core CPI rate to accelerate from 3.0% to 3.2%, which may increase pressure on the BOJ to continue on their rate hiking cycle which may aid the JPY and vice versa.

EUR/USD appears to be moving in an upwards fashion, with the next possible target for the bulls being the 1.1470 (R1) resistance line. We opt for a bullish outlook for the pair and supporting our case is the RSI indicator below our chart which currently registers a figure near 70, implying a strong bullish market sentiment. In addition to the MACD indicator which also implies a bullish market sentiment. For our bullish outlook to continue we would require a clear break above the 1.1470 (R1) resistance line with the next possible target for the bulls being the 1.1680 (R2) resistance level. On the flip side for a sideways bias we would require the pair to remain confined between the 1.1195 (S1) support level and the 1.1470 (R1) resistance line. Lastly, for a bearish outlook we would require a clear break below the 1.1195 (S1) support level with the next possible target for the bears being the 1.0960 (S2) support line.

USD/JPY appears to be moving in a downwards fashion. We opt for a bearish outlook for the pair and supporting our case is the RSI indicator which currently registers a figure near 30 implying a strong bearish market sentiment, in addition to the MACD indicator and downwards moving trendline which was incepted on the 28th of March. For our bearish outlook to continue we would require a clear break below the 141.75 (S1) support level, with the next possible target for the bears being the 139.60 (S2) support line. On the flip side for a sideways bias we would require the pair to remain confined between the 141.75 (S1) support level and the 144.55 (R1) resistance line. Lastly, for a bullish outlook we would require a clear break above the 144.55 (R1) resistance line with the next possible target for the bulls being the 147.40 (R2) resistance level.

دیگر نکات مهم امروز:

In today’s European session, we get Germany’s producer prices for March,  from Turkey CBT’s interest rate decision and we highlight a bit later ECB’s interest rate decision. In the early American session, we get from the US the weekly initial jobless claims figure and the Philly Fed Business index for April, while we note ECB President Lagarde’s press conference and IMF Managing Director Kristalina Georgieva as well as Fed Board Governor Michael Barr are scheduled to speak. In tomorrow’s Asian session, we note the release of Japan’s CPI rates for March.  

EUR/USD  Daily Chart

• Support: 1.1185 (S1), 1.0950 (S2), 1.0740 (S3)
• Resistance: 1.1470  (R1), 1.1685 (R2), 1.1890 (R3)

USD/JPY Daily Chart

• Support: 141.75 (S1), 139.60 (S2), 137.25 (S3)
• Resistance:  144.55 (R1), 147.40 (R2), 149.80 (R3)

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