EURUSD Faces Rejection at 1.0900 As Market Awaits ECB Interest Rate Decision

Summary:
• EURUSD traders have their eyes and ears on ECB policy makers and Fed Chairman Jerome Powell, in a busy day for the pair.

EURUSD trades at 1.0897 on Thursday in the early morning European session, after getting tailwinds from weak dollar fundamentals. The pair faces rejection at 1.0900, but still trades near its highest level since January 24^th. EURUSD will be looking for fresh impetus from multiple announcements in the Eurozone, and high-impact data from the United States on Thursday.

The US dollar faces downward pressure after the ADP Nonfarm Employment Change data came in at 140k, fell below expectations by 9k.  The data provides a snippet of what could come out of the much-awaited Nonfarm Payrolls data, which will be out on Friday. In the meantime, the dollar also faces headwinds from low-yielding US Treasuries. Yields on the 5-year and 10-year US Treasury Bonds have struggled under 4.200%, and stood at 4.1% at the time of writing.

Also, the EURUSD currency pair will get propulsion from the scheduled release of Initial Jobs Claims data. The pinnacle of the day will, however, revolve around the European Central Bank (ECB) interest rate decision and Federal Reserve Chairman Jerome Powell’s statement in Congress. The Eurozone’s economy printed out significant improvements in its February macroeconomic data releases, and this could be reflected in the ECB decision and could feature in the Press Statement later in the day.

The dollar looks for support from Powell, after the lower-than-expected February ADP Nonfarm Employment Change data neutralized the impact of forecast-beating January JOLTs Jobs Opening Data. The Fed Chairman’s statement on Wednesday failed to inject strength into the dollar, after he confirmed market viewpoint that the Fed will cut interest rates this year.

Technical Analysis

EURUSD has established a pivot at 1.0880, with the RSI momentum indicator swinging towards the upside.  If the buyers maintain control above the pivot, they could break the resistance at 1.0915. Control by the bulls beyond that mark could see the rate test the next resistance at 1.0930. Alternatively, a slip below 1.0880 could put the sellers in charge. That will favour downside momentum to the 1.0865 support. Continued control by the sellers beyond that point will break the support and possibly test the next support at 1.0850.