EUR - Euro trades sideways, with the Federal Reserve rate meeting on focus this week

The dollar weakened on Monday as markets weighed continued uncertainty over President Trump's tariff policy and its impact on the economy. Trump doubled down on his tariff-driven policy in an interview on Sunday, reiterating that tariffs on imported goods will ultimately make Americans richer. He announced on Sunday a 100% tariff on films made outside the United States. Finance Minister Jeff Bessant on Monday defended Trump's tariffs, stressing that his broader agenda, including tax cuts, would ultimately lead to long-term economic growth. Separately, Trump said he would not fire Federal Reserve Chairman Jerome Powell before the end of his term, but he again called for lower interest rates and called Powell a "rigid person." The Federal Reserve will conclude its two-day meeting on Wednesday and is widely expected to keep interest rates unchanged following a solid March jobs report released last Friday. Currently, markets are implying just a 37% chance of a Fed rate cut in June, down from 64% a month ago.

From the technical chart, we can see that the RSI and stochastic index have been trading sideways at a low level for a long time, and the exchange rate has been staying in the 1.12 range in recent days. We need to be cautious that the euro may be accumulating strength to rise again. The resistance level will return to 1.1350 and 1.14, and the next level will be 1.15 and 1.1620. The key level is expected to be at the 1.18. In terms of supporting levels, if calculated based on the cumulative increase from the low of 1.0731 on March 27 to last week's high, the 38.2% retracement level is 1.1250, and the expansion to 50% and 61.8% is at 1.1150 and 1.1050 levels. The key level is 1.10; also pay attention to the 25-day moving average of 1.1250, where the euro found support in early April.

Forecast range:
Resistance 1.1350 – 1.1400 – 1.1500 – 1.1620 – 1.1800
Support 1.1250* – 1.1150 - 1.1050 - 1.1000*

Focus:

Tuesday: Eurozone April services composite PMI (16:00)
Eurozone March PPI (17:00)

Wednesday: Eurozone March retail sales (17:00)

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