The European markets are expected to have thin trading volumes on Thursday due to the holiday closure of German and French markets for Ascension Day. Additionally, the economic calendar on both sides of the Atlantic is limited, with US data not expected to pick up until the release of the University of Michigan Consumer Sentiment Index on Friday. As a result, broader markets are expected to continue churning on expectations of a rate cut.
EUR/USD is currently hovering near 1.0750 and is stuck within the week’s opening trading range. With European markets closed, traders will be looking out for speeches from European Central Bank (ECB) policymakers, although they are expected to avoid making significant announcements during the holiday period. Meanwhile, US Initial Jobless Claims for the week ended May 3 are expected to show a slight uptick to 210K from the previous week’s 208K.
The key data release for the week will be Friday’s US UoM Consumer Sentiment Index, which is anticipated to ease to 7.0 for the month of May from the previous print of 77.2. The strong consumer outlook in March had led to hopes of an improving US economy, potentially delaying any Federal Reserve rate cuts. In terms of technical analysis, EUR/USD is moving towards the 200-hour Exponential Moving Average (EMA) at 1.0734, with a bearish rejection forming as the pair struggles to break above the 200-day EMA at 1.0788. The near-term peak is at 1.0813, and a continuation to the downside could push the pair towards the 1.0600 handle.
In conclusion, the European markets are expected to see thin trading on Thursday due to the holiday, while US data is limited until Friday’s release of the University of Michigan Consumer Sentiment Index. EUR/USD is stuck near 1.0750 and remains within the week’s trading range, with the pair’s technical outlook showing a bearish bias as it struggles to break above key EMAs. Traders will be keeping an eye on any speeches from ECB policymakers and the upcoming US data releases for potential market moves.
