- EUR/USD looks for clear direction, recently rising, around one-month high.
- S&P 500 Futures ignore vaccine jitters amid the cautious optimism of the EU and the US central bankers.
- German CPI, US Retail Sales will be the key.
EUR/USD rises to 1.1982, up 0.05% intraday, amid Thursday’s Asian session. The currency major rallied for three consecutive days on Wednesday amid broad US dollar weakness. While economic optimism could be cited as the base case for the quote’s run-up, vaccine jitters and geopolitical challenges were largely ignored.
Market sentiment was upbeat the previous day after ECB President Christine Lagarde praised the US stimulus to help the bloc’s economy. The European Central bank (ECB) leader said, “The United States' fiscal response is expected to lift the European growth by 0.3% over the medium term.”
On the other hand, Fed Chair Jerome Powell repeated his old statements of moderate economic recovery and upbeat employment data. The US central bank Chief also rejected any tapering at least till 2022. It’s worth mentioning that the Fed’s monthly Beige Book said, “American businesses are feeling more optimistic as vaccinations against Covid-19 become common, and economic activity accelerated moderately in recent weeks.”
Elsewhere, US Centers for Disease Control and Prevention (CDC) extends the pause on the usage of the Johnson & Johnson vaccine amid a lack of more data to assess the risk. However, ample jab supplies were spotted by the US authorities to tame the risk.
Recently, the US turned down plans to deploy warships in the Black Sea while the Saudi-led coalition destroyed explosive-laden drone fired at the direction of Jazan, per State TV.
Amid these plays, S&P 500 Futures print mild gains after the Wall Street benchmark refreshed record top whereas the Treasury yields await Tokyo open for fresh impulse.
Given the stimulus hopes and a lack of major negatives on the risk side, EUR/USD may remain firm. However, German CPI for March, expected to remain unchanged at 2.0% YoY, can offer immediate direction ahead of the US Retail Sales figures for the stated month.
Read: US March Retail Sales Preview: Can a strong rebound ramp up inflation expectations?
Technical analysis
A clear break above 1.199 becomes necessary for EUR/USD bulls to justify the crossing of 50-day SMA.
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