EU Parliamentary elections have caused market instability as voters shift support towards center-right and far-right parties, expressing dissatisfaction with current economic policies. Meanwhile, in the US, investors are awaiting updates on CPI inflation and the Fed’s rate call, particularly focusing on the anticipated changes to the Fed’s “dot plot” on interest rate expectations.
US CPI inflation is expected to decrease in April, while the Fed is likely to maintain interest rates for now. However, investors are concerned about potential changes in the dot plot, especially regarding the possibility of rate cuts in 2024.
On the technical side, EUR/USD has experienced a sharp decline in recent days, falling below key levels and challenging support near 1.0750. The pair has also dropped below the 200-day EMA, indicating a bearish trend.
Overall, market sentiment is cautious as investors await the outcome of the US CPI inflation data and the Fed’s rate call, which will heavily influence trading decisions in the coming days.