- The EUR/USD outlook shows an increasing likelihood of ending the Ukraine war.
- The Ukraine war has had negative effects on the Eurozone economy.
- The dollar rallied against most of its peers except the euro after US inflation data came in higher than expected.
The EUR/USD outlook remains positive amid the increasing likelihood of ending the Russia-Ukraine war. As a result, the euro gained despite upbeat US inflation figures that strengthened the dollar against most of its peers.
Reports on Wednesday revealed that the US President is ready to mediate an end to the Russia-Ukraine war. Trump talked to Ukraine’s Zelenskiy and Russia’s Putin and said that both leaders wanted peace and an end to the war.
For almost three years now, the Ukraine war has had negative effects on the Eurozone economy. At the same time, it has impacted the global economy, especially leading to a dramatic surge in oil prices that pushed inflation in most major economies higher. An end to the war would eliminate the ever-present risk of an escalation. Moreover, it would allow the Eurozone economy to recover from the impacts of the war.
Elsewhere, the dollar rallied against most of its peers except the euro after inflation data came in higher than expected. The monthly CPI increased by 0.5%, above estimates of 0.3%. Meanwhile, the annual figure increased by 3.0%, beating forecasts of 2.9%. The upbeat report led to a drop in Fed rate cut expectations, supporting the dollar.
EUR/USD key events today
- US Core PPI m/m
- US PPI m/m
- US unemployment claims
EUR/USD technical outlook: Bulls eye the 1.0500 resistance
On the technical side, the EUR/USD price has broken above a strong resistance zone comprising the 30-SMA, a bearish trendline and the 1.0400 resistance level. The break indicates a surge in bullish momentum that could lead to a new uptrend.
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Initially, the price was trading in a corrective bearish move, chopping through the 30-SMA. However, when the price made a higher low near the 1.0301 support level, it was a sign that bulls would seek a higher high.
As a result, the price rallied and broke above the 30-SMA and its resistance trendline. Moreover, it broke above the 1.0400 and made a higher high. Given the stronger bullish momentum, EUR/USD might climb to retest the 1.0500 resistance. A break above this level will strengthen the bias.
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