- The beginning of this week’s trading was in favor of completing the selling operations that the EUR/USD currency pair was exposed to since the middle of last week’s trading.
- Its losses affected the 1.0831 support level before settling around the level of 1.0860 at the time of writing the analysis.
- It was awaiting the signals of the US Central Bank with the announcement of the content Minutes of its last meeting, and before that, the announcement of US inflation readings.
Investors are turning their focus to the world's top finance ministers and central bankers meeting this week in Washington. They were looking for fresh clues about the outlook for everything from interest rates, banking stability, and debt relief to oil prices and the testing of US-China relations.
Major central banks, including the US Federal Reserve and European Central Bank, have indicated that halting inflation remains their top priority despite last month's banking problems, which have raised the specter of broader economic risks. The spring meetings, which will be held from April 10 to 16, hosted by the International Monetary Fund and the World Bank, will also witness a wide range of related meetings, including the meeting of the Group of Twenty of financial officials. The G20 will face yet another contentious attempt to craft a joint statement on its outlook for the global economy, having failed to do so in February thanks to disagreements over Russia's invasion of Ukraine.
Cross-border banking problems and a deteriorating economic outlook had previously spurred increased cooperation in these groupings. But “fragmentation” is now the order of the day, and it is one of the main risks that the Managing Director of the International Monetary Fund, Kristalina Georgieva, warned about last week when she presented a bleak global outlook. It is unclear whether the week will see any meeting between senior US and Chinese officials amid a broader breakdown in their bilateral engagement.
Commenting on the event, Josh Lipsky, a former IMF adviser who is now a senior director at the Atlantic Council, said that “The fundamental question is how can the IMF and the World Bank work effectively if the two largest economies in the world don't really want to work together.”
The IMF will release its World Economic Outlook report on Tuesday morning, with revised global growth forecasts, and will co-host a debt roundtable on Wednesday. The G20 concludes its meetings on Thursday.
Misreading inflation in 2021 by the Federal Reserve, European Central Bank, and others continues to be echoed. A Silicon Valley bank failed last month after its bond holdings plummeted in the wake of aggressive increases in US interest rates to rein in consumer prices, a collapse that unleashed wider banking woes.
For its part, China's central bank said last month that the SVB incident showed the dangers of rapid interest rate increases. India is among those dissatisfied with the way developed countries have dealt with the inflation challenge. Sanjeev Sanyal, economic adviser to Prime Minister Narendra Modi, last month called on the US and the eurozone to delay further monetary tightening after banking problems, and criticized developed countries for excessive fiscal stimulus during the pandemic.
EUR/USD Technical Outlook:
According to the performance on the daily chart below, there is a shift in the direction of the EUR/USD currency pair. The bears' control over the trend will increase if the current selling operations continue and the currency pair moves below the support level of 1.0780, which is an important break for the change in the pair's outlook.
On the other hand, over the same time period, breaking the 1.1000 psychological resistance will be important for the bulls to continue controlling the trend. The EUR/USD currency pair may continue to move in narrow ranges, amid caution, until the markets and investors react to the announcement of US inflation numbers and the content of the minutes of the last meeting of the US Federal Reserve.
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