The single currency surged from daily lows and rose nearly 50 pips in a matter of minutes to trade slightly higher on the day, hovering around the 1.23 mark.
The Eurozone’s inflation is expected to accelerate notably to 1.4% year-on-year, from 1.1% previously, with the core inflation gauge also predicted to tick higher a notch to 1.0%.
Later in the day, investors will focus on the US calendar, which will offer the ADP employment report for the month of March. The markets expect 208,000 new jobs, down from 235,000 in February. This could weaken the greenback slightly.
Shortly after, the non-manufacturing ISM report is forecast to ease slightly to 59.0 from 59.5 previously. Again, weaker number could cause some selling of the US dollar.
The EURUSD pair declined below the bullish trendline from 2018 lows, which could be a bearish signal. The first support is seen at 1.2230 and if not held, the euro might decline toward the 100 DMA at 1.2140.
On the other hand, the resistance is at the mentioned trendline near the 1.23 level and if broken, further appreciation toward 1.2380 could occur. In all cases we strongly recommend to have rigorous money and risk management.
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