The EUR/USD pair experienced a volatile day on Thursday due to mixed US data impacting the markets. The US GDP growth for Q1 slowed more than anticipated, dropping to 1.6% from the previous 3.4%, below the expected 2.5%. This decrease in growth raised hopes for faster rate cuts from the Federal Reserve, but excessive cuts could have negative consequences on the US economy.
Additionally, the US Personal Consumption Expenditure (PCE) inflation rose to 3.4% in Q1, up from 1.7% in the previous quarter. This high inflation rate reduced expectations for rate cuts and led to a decline in risk appetite in the US market session. However, the markets saw a slight recovery later on.
Looking ahead, investors will focus on the US PCE Price Index figures for March to gain insight into the country’s inflation outlook. The market expects the Core MoM PCE Price Index to remain steady at 0.3% with an annualized figure of 2.6%.
On the technical side, the EUR/USD pair is currently trading just above the 200-hour Exponential Moving Average (EMA) at 1.0690. The pair faces resistance around the 1.0880-1.0860 range, while a drop below the 200-day EMA at 1.0795 could dampen bullish sentiment, despite support near 1.0600.
In conclusion, the EUR/USD pair remains sensitive to economic data and market sentiment, with investors closely watching US inflation figures for further guidance.