Скачать или смотреть 01.04.2022: EU reports record high inflation rate. USD rallies. Outlook for EUR/USD and GBP/USD

All traders are waiting for the release of important data from the US. The US Labor Department is going to publish its employment report that will hint about further tightening of the Fed’s monetary policy. Markets are sure that the benchmark rate will be raised by 50 basis points at each meeting. Such predictions are boosting the US dollar. In our video review on InstaForex TV channel, we will learn about the current positions of the European currencies.
Of course, expectations of a more aggressive stance on monetary policy tightening will become stronger in case of positive data on the US employment. A higher interest rate is expected to cap surging inflation, whereas a resilient labor market will ensure the economic recovery. This forecast distinguishes the US from the European Union, where the central bank has chosen an absolutely different approach to monetary policy.
The eurozone monetary authorities refuse to raise the benchmark rate. Earlier, they insisted that high inflation was a short-lived phenomenon. Now, they explain surging inflation by a jump in the price of energy resources caused by the Russia-Ukraine conflict.
Today, the eurozone disclosed its preliminary inflation figures for March. The consumer price growth hit a record high of 7.5% on a yearly basis. Inflation has been reaching new highs for the fourth month in a row. It three times exceeds the ECB’s targeted level of 2%.
EUR/USD
Against this backdrop, the euro/dollar pair accelerated its downward correction. The pair dropped from the resistance level of 1.1180. As a result, the number of short positions jumped, thus causing a drop of appproximately 100 pips.
At the moment, we can see insignificant stagnation near 1.1060. To resume the downward movement, the quote should settle below 1.1040. This, in turn, may cause a drop to 1.1000 or even deeper to 1.0970. (*)
According to the alternative scenario, the pair may return to the lower limit of the range of 1.1120/1.1180. The US dollar is likely to remain in demand.
Meanwhile, the pound/dollar pair slackened, thus signaling about uncertainty among traders.
Under the current conditions, traders should pay attention to consolidation within the channel between 1.3105 and 1.3180, where we can see high speculative activity. A break of either limit of the range of 1.3100/1.3185 is highly likely to cause new price swings.
All this means that buy orders could be initiated if the price consolidates above 1.3185 with the target at 1.3220.
Sell positions could be opened if the price settles below 1.3100 with the target at 1.3060-1.3000.
00:00 Intro
01:05 ECB KEY INTEREST RATE
01:24 EUROZONE ANNUAL INFLATION RATE
01:49 EUR/USD
02:39 GBP/USD

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