The EUR/USD has bounced from five-month lows despite market expectations regarding the Federal Reserve (Fed). Meanwhile, members of the European Central Bank (ECB) indicated that there is a high possibility of more than three rate cuts this year.

There is also a strong possibility that investors will seek refuge in the US dollar (USD) due to escalating tensions in the Middle East. The EUR/USD has bounced from a five-month low of 1.0622 last Friday and was trading at 1.0660 during the early part of the European session. The EUR/USD is coming off a week where its downtrend has been much more pronounced after the ECB and Fed unveiled different monetary policies.

On Monday, investors await the release of industrial production data in Europe for the month of March. Additionally, the focus will be on U.S. retail sales figures due today.

The European Central Bank remarked that if core inflation continues to decelerate as expected, there is a possibility of contemplating an interest rate cut in June. For its part, the Federal Reserve appears to be reviewing its monetary easing strategies in the wake of persistent inflation coupled with solid macroeconomic data. Last Thursday’s data showed that core producer inflation in the U.S. rose sharply year-on-year during the month of March, even beating estimates for an increase.

Daily technical analysis EUR/USD April 15th

The technical context is bearish as the EUR/USD pair has seen significant declines, making trading opportunities scarce at the moment.

There is no major event on the economic calendar this week that could serve as a catalyst to break the market trend at the moment.

The pair might find a psychological barrier at 1.0800, but it is currently testing support levels at 1.0655 and 1.0500 as it rebounds from five-month lows. Despite today’s pending data releases in the Eurozone and the US, this may not provide sufficient momentum to alter the trend and improve the pair’s position for market traders.