Last trading week was none of our favorites since low volatility has left us with uncomfortably narrow trading ranges. This has led to some false price breakouts, particularly in the EUR/USD and DAX. Despite the ongoing war in Ukraine, we can see an increase in the market’s appetite for risk which was evident in the most liquid cryptocurrency pairs surging above recent resistance levels. However, while everybody hopes for a ceasefire in Ukraine that would ease pressure on the market, the ‘risk on’ approach could be premature and dangerous.
The U.S. dollar has fallen even if the Federal Reserve follows the most aggressive monetary policy approach in over 20 years. The market is pricing in a 60 percent chance of a 50bps rate hike in May and 70 percent chance of another 50bps hike in June. Given the Fed’s hawkish lean, dollar bulls should keep an eye on USD crosses.
This week we will watch the PCE deflator on Thursday and the Nonfarm Payrolls on Friday.
EUR/USD – Testing the 1.0950-support
The euro seems to be primed for a dip towards 1.09, provided that 1.0950 breaks. We will then pay attention to a potential break below 1.0880 which could send the euro tumbling towards 1.07. Overall, as long as the euro remains below 1.1050, we favor a bearish bias. We have set our daily entries today at 1.1010 (long) and at 1.0940 (short). 
GBP/USD: The cable refrained from a climb above 1.33 and fell back towards 1.3140. For further bearish momentum towards 1.2950, we would need to see a sustained break below 1.3080.
We have set our daily entries today at 1.3190 (long) and at 1.3130 (short).
Disclaimer: All trading ideas and expressions of opinion made in the articles are the personal opinion and assumption of MaiMarFX traders. They are not meant to be a solicitation or recommendation to buy or sell a specific financial instrument.