Markets are closely watching a trio of high-impact events on Thursday, including Australia’s employment data, the European Central Bank’s rate decision, and US jobless claims. With the eurozone facing renewed pressure from trade tensions and softening inflation, the ECB is widely expected to cut rates once again—potentially influencing EURUSD volatility. Meanwhile, technical conditions for the pair remain bullish, supported by a robust uptrend that began in mid-January. However, signs of momentum divergence suggest that traders should stay alert for a possible near-term pullback as economic and geopolitical risks continue to evolve.
High Impact Economic Events
Thursday 04:30 am (GMT+3) – Australia: Employment Change (AUD)
Thursday 15:15 (GMT+3) – Europe: Main Refinancing Rate (EUR)
Since establishing a bottom at 1.01768 on January 13, EURUSD has advanced over 11%, underpinned by a combination of positive technical and fundamental factors.
The early reversal was defined by a failure swing pattern, highlighting a structural shift in market sentiment. Notably, the trough at 1.02760 remained above the prior trough, and the subsequent breakout above 1.04418 confirmed a bullish market structure and marked the beginning of a sustained uptrend.
Momentum accelerated as the pair cleared both the 20- and 50-period Exponential Moving Averages (EMAs), triggering a classic “Golden Cross” — a widely followed signal of trend continuation.
From an indicator standpoint, the Momentum Oscillator has held consistently above the 100 threshold, reflecting robust bullish momentum. Additionally, the Relative Strength Index (RSI) remains anchored above the 50 level, reinforcing the view that buyer demand remains intact.
However, the recent negative divergence between price action and the Momentum Oscillator warns of a potential retracement in the near term.
Key Resistance Levels
Should the bulls maintain market control, traders may direct their attention toward the four potential resistance levels below:
1.14726: The initial resistance level is set at 1.14726, which mirrors the daily high reached on April 11.
1.15766: The second price target is identified at 1.15766, representing the 261.8% Fibonacci Extension frown from 1.14726 to 1.08776.
1.18300: The third price objective is determined at 1.18300, which corresponds with the weekly resistance, R2, estimated using the standard Pivot Points methodology.
1.20086: An additional price target has been established at 1.20086, mirroring the 423.6% Fibonacci Extension drawn from 1.14726 to 1.08776.
Key Support Levels
Should the sellers take market control, traders may consider the four potential support levels listed below:
1.11446: The initial support level is seen at 1.11446, corresponding to the daily high formed on April 3.
1.09538: The second support level is estimated at 1.09538, representing the high point marked on March 18.
1.06718: The third support level is identified at 1.06718, reflecting the 61.8% Fibonacci Extension drawn from 1.01768 to 1.14726.
1.05279: An additional downside target is 1.05279, mirroring the peak from February 26.
Fundamentals
The European Central Bank is widely expected to cut interest rates by 25 basis points to 2.25% on Thursday—its sixth consecutive reduction—as cooling inflation and mounting trade tensions with the US weigh on the eurozone outlook. Economists view the move as pre-emptive insurance against growth shocks, with inflation easing to 2.2% in March and core inflation hitting its lowest level since early 2022. The ECB’s dovish shift comes amid growing uncertainty over US tariffs, which has disrupted business sentiment and raised fears of a slowdown. Further rate cuts are likely if trade frictions continue to escalate.
Conclusion
With the ECB poised to deliver another rate cut and fresh labor market data due from Australia and the US, traders should brace for elevated EURUSD volatility. While the pair remains technically bullish, supported by trend continuation signals and solid momentum, emerging divergence hints at possible short-term weakness. On the macro front, softening inflation and escalating trade tensions continue to shape the policy outlook. Whether the euro extends its rally or pulls back, this week’s events could be decisive in determining the next leg of its trajectory.
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