EUR/USD: Weekly Preview. The Fed, ECB, PCE, and More: The Final Note of April Promises to Be Loud

The xm开户注册upcoming week promises to be informative and, consequently, volatile. The Federal Reserve and the European Central Bank will hold their April meetings, while a block of significant macroeconomic data will be released in the United States: the core PCE index, GDP growth, the ISM manufacturing index, and the consumer confidence index. Additionally, the market will react to the geopolitical agenda amid the effective freeze in diplomatic process between the US and Iran.

In other words, EUR/USD traders are unlikely to be bored in the upcoming week: we can expect a well-filled news feed and a high probability of sharp price fluctuations.

The Fed and the ECB

On Wednesday, April 29, the U.S. Federal Reserve will conclude its latest meeting. The overwhelming majority of analysts believe the central bank will keep all monetary policy parameters unchanged. According to the CME FedWatch tool, the probability of this scenario is 99%.

The central bank is also expected to adopt a cautious rhetoric and announce a wait-and-see stance in the coming months. The Fed will likely acknowledge that progress toward the inflation target has slowed, as indicated by the core PCE index, which remains around 3%. At the same time, the central bank will probably note that the U.S. labor market remains "resilient," despite low job creation rates. The essence of this message will be that the latest NFP reports do not provide grounds for an urgent easing of monetary policy.

Additionally, geopolitical risks that create additional inflationary threats are likely to be mentioned in the accompanying statement.

All of these points have been repeatedly voiced by Fed representatives, so such rhetoric is unlikely to surprise market participants. There is a high probability that the April meeting will be a "passing" event.

However, there is one caveat. The upcoming meeting will be the last during Jerome Powell's current term as Fed Chairman. For him, this is a "final note" to be played under considerable pressure from Trump and the nomination of Kevin Warsh as the next head of the central bank. Therefore, at the final press conference, journalists will ask him questions not only (conditionally) about inflation but also about his plans to remain on the Board of Governors after May 15 and his assessment of the Fed's independence in the future. Emotional or ambiguous answers could provoke increased volatility in the EUR/USD pair.

It is worth noting that the U.S. Treasury Department discontinued its investigation into Jerome Powell, which could influence the degree of firmness in his rhetoric.

Now, a few words about the upcoming European Central Bank meeting, the results of which we will learn on Thursday, April 30. According to most analysts' estimates, the ECB is also expected to keep all monetary policy parameters unchanged. At the same time, the central bank is unlikely to tighten its rhetoric, given the dynamics of key macroeconomic indicators.

Recall that the overall CPI in the eurozone accelerated in March to 2.5% year-on-year. This is the fastest growth rate since January 2025. However, the core inflation figure, excluding energy and food prices, unexpectedly slowed down to 2.3%. This indicates that the March inflation rise in the eurozone was driven by external—"energy"—factors rather than internal "demand" factors.

Meanwhile, key macroeconomic indicators—such as the PMI, ZEW, and IFO indices—have not only reflected existing risks but also indicated that the eurozone economy (especially Germany) has entered a phase of decline. The April figures turned out to be significantly worse than forecasts; in particular, the composite PMI index for Germany fell into contraction territory for the first time in the last year, crashing to 48.3 (compared to 51.9 in March).

It is clear that raising interest rates under these conditions could "suffocate" the economy, so the central bank will likely adopt a wait-and-see approach, with no hints of potential monetary policy tightening in the foreseeable future. Such outcomes from the April ECB meeting—a "bearish pause"—could put pressure on the euro.

Macroeconomic Data

The most important macroeconomic reports for the upcoming week will be published in the US.

On Tuesday, April 28, the Conference Board's Consumer Confidence Index will be released. For the past two months (February and March), this indicator has shown an upward trend, reaching 91.8 in March. However, a slight decline to 89.4 is expected for April. If, contrary to expectations, the index comes in higher than the March level, the dollar will receive additional support, as this result will indicate sustained consumer demand and Americans' confidence in their financial prospects.

On Wednesday, April 29, key inflation growth data will be published in Germany. Typically, German and broader European data show high correlation, so this report could trigger volatility in the EUR/USD pair. Inflation in Germany is forecasted to accelerate in April, with the overall CPI expected to rise to 3.0% year-on-year and the core CPI to 3.1% year-on-year.

Thursday (April 30) will be the busiest day of the week. First, we will learn the preliminary data on the economic growth of the eurozone. Most experts believe that GDP will increase by 0.8% year-on-year in the first quarter, following a 1.2% growth rate in the previous quarter. Secondly, we will look at inflation data for the eurozone. Overall CPI is expected to accelerate to 3.2%, while core CPI is expected to reach 3.0%.

During the American trading session on Thursday, preliminary data on U.S. economic growth for the first quarter will be released. It is anticipated that GDP will increase by 1.5%, following a weak 0.5% growth rate in the fourth quarter of the previous year. On that same day, we will learn the March value of the core PCE index, which is expected to accelerate again to 3.1%, after a decline to 3.0% in February.

Finally, on Friday, the ISM Manufacturing Index will be published. For three months (January, February, March), this index has remained at multi-year highs, reflecting the robust recovery in the manufacturing sector and the expansion of business activity in the U.S. industry. Most analysts predict that the index will be at 53.2 in April. If this forecast is confirmed, it will represent the highest value for the indicator since August 2022.

Geopolitics

Despite the economic calendar of the upcoming week being filled with significant events, geopolitical issues remain at the center of traders' attention. Any major escalation or de-escalation events will overshadow all other fundamental factors.

It is worth mentioning that Donald Trump officially canceled the trip of his special envoys (Witkoff and Kushner) to Pakistan. The U.S. president explained this by his unwillingness to "spend time on 18-hour flights for empty talks." However, immediately after canceling the trip, Trump announced that he received a new set of proposals from Iran, describing it as "much better than the previous one, but still not good enough." At the same time, the indefinite ceasefire (declared on April 8 and extended on April 21) remains formally in effect: according to the White House, the cancellation of the American delegation's visit "does not automatically signify a resumption of hostilities."

The direction of the EUR/USD price will largely depend on how events unfold regarding the Middle Eastern conflict. If both parties agree to come to the negotiating table, there will be renewed interest in risk assets, including the euro. However, an alternative—escalation—scenario is also possible. For instance, if pro-Iranian groups in the region resume attacks on American bases (which is not unlikely, especially after recent Israeli strikes on Lebanon), Trump might use this as a pretext to exit the ceasefire and resume missile and bombing strikes on Iranian facilities. In such a case, the safe-haven dollar would benefit from the situation.

Technical Analysis

From a technical perspective, the EUR/USD pair on the daily chart is positioned between the middle and upper lines of the Bollinger Bands, but it is also within the Kumo cloud and between the Tenkan-sen and Kijun-sen lines. On the four-hour chart, the price is similarly located within the Kumo cloud and between the Kijun-sen and Tenkan-sen lines. All of this indicates a prevailing uncertainty in the market.

Long positions should be considered only after the pair consolidates above the resistance level of 1.1760 (the Tenkan-sen line on the D1 chart). In this case, the Ichimoku indicator will generate a bullish "Line Cross" signal. The next resistance level will be at 1.1850 (the upper line of the Bollinger Bands on the same timeframe).

Selling positions may be appropriate after sellers push through the 1.1670 support level (the lower line of the Bollinger Bands on the H4 chart). In this scenario, the price is likely to head towards the base of the 16th figure and test the support level at 1.1600 (the lower boundary of the Kumo cloud on the D1 timeframe).

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