The Two Trades to Look Out for Today and Why

The Two Trades to Look Out for Today and Why

EUR/USD Technical Analysis

EUR/USD is down for the second straight day on the back of a stronger dollar after yesterday’s GDP data and new jobless claims.


Today is a busy day in the economic calendar, with preliminary inflation data for Germany and France and GDP data for France, Germany and the eurozone as a whole.


German inflation should rise slightly to 7.3% in April versus 7.4% in March. Meanwhile, euro-zone GDP data for the first quarter should show the economy growing 0.2% quarterly after a slump in the fourth quarter of 2022.


Stronger growth and persistent inflation could nourish expectations of a 50-basis point rate increase by the ECB at its May meeting.


EUR/USD Forecast

20 SMA pulled up EUR/USD. However, the upward move appears to be losing momentum as the pair awaits the release of today’s key data.


Buyers will be looking for an upward move above the 1.1095 2023 high to extend earnings towards the 1.1185 March 2022 high.


Immediate support is seen at 1.0960, 20 SMA, which has propelled the price higher for the last month. A break here opens the door to 1.0920, last week’s low and 1.0825, a combination of the 50-SMA and uptrend line support.


USD/JPY Technical Analysis

USD/JPY is up for the second straight day after the Bank of Japan (BoJ) maintained a very accommodative monetary policy, kept interest rates at -0.1%, and controlled the yield curve.


BoJ Governor Kazuo Ueda, the Central bank, will launch a review of the implications of the accommodative monetary policy, dashed any hopes of a quick hawkish surprise.


The data comes after yesterday’s GDP data showed that US economic growth fell to 1.1% in the first quarter at an annualised rate versus 2.6%. However, the PCE such-index was greater, rising 4.2%, and consumer spending increased by 3.7%, suggesting there is scope for further rate hikes by the Fed.


USD/JPY Forecast

USD/JPY broke above the 135.00 resistance and confirmed the upside break that followed recovery from the 100 SMA earlier in the week.


Buyers will look for upside resistance at 136.00 on the way to the 2023 high at 137.90.


Failure to clear 135.00 could mean bearish test support at 133.90, 50 SMA ahead of the 133.00 weekly low. A downside break creates lower lows.