Focus on Monetary Policy Divergence
- Fed Expectations: The Fed is expected to maintain interest rates at 4.25–4.50%. Powell recently emphasized unresolved inflation risks and warned of stagflation dangers due to trade tariffs.
- ECB Dovishness: The ECB lowered the key interest rate to 2.25% and signaled further easing steps as early as June, putting pressure on the Euro.
Speculative Positioning
Despite ECB policy, speculators hold their net long positions in the Euro at a multi-year high of about 75,800 contracts (CFTC data as of April 29). However, commercial players remain cautious (net short: about 131,000 contracts).
Technical Analysis
Daily Chart Perspective
- Resistance:
- Immediately at 1.1370 (100-SMA on the 4h chart)
- Key zone around 1.1572 (2025 high) up to historical hurdles at 1.1692 (October 2021)
- Support:
- 20-day SMA (~1.1325), followed by the psychologically significant level at ~1.1230
- 200-day SMA and March lows (~1.0732–0782) as long-term safety nets
- Indicators: RSI stabilizing around ~56/58 daily/4h chart with moderate upward potential; ADX (~47 daily) confirms intact trend.
Short-Term Dynamics
On the 4-hour chart, a neutrality pattern appears between:
- Bullish baseline at the 20-SMA (~1.1325)
- Resistance from the 100-SMA
Outlook for Investors
The immediate price dynamics significantly depend on the following factors:
| Factor | Direction of Influence |
|---|---|
| Fed Communication | USD strengthening with hawkish tone |
| ECB June Guidelines | EUR burdensome with further dovish guidance |
A clear breakthrough above important resistances could open the gate to higher levels, while a fall below key supports could trigger a correction. The current consolidation reflects market uncertainty – a typical pattern before high-profile central bank decisions.