The EUR/USD currency pair is currently holding steady at the key support level of 1.0900 as investors await the release of US inflation data for July. Both annual headline and core inflation figures are expected to show a slight deceleration, potentially impacting the direction of the pair. Additionally, the European Central Bank (ECB) is anticipated to implement two more interest-rate cuts this year, further influencing the market dynamics.
The Eurozone economic calendar for the week includes revised estimates of flash Q2 Gross Domestic Product (GDP) and preliminary Employment Change data, due to be published on Wednesday. Positive GDP and employment figures are seen as favorable for the Euro, potentially reducing the likelihood of further policy easing by the ECB. Investors are closely monitoring any signals from the central bank regarding the extent of key borrowing rate adjustments in light of the current economic conditions.
In the US, market participants are closely watching the release of the Consumer Price Index (CPI) data for July, which is scheduled for Wednesday. Expectations are for both monthly headline and core inflation to have increased by 0.2%, while annual figures are projected to have slightly slowed down. The Federal Reserve (Fed) is expected to begin reducing interest rates in September, with traders pricing in a lower likelihood of a significant rate cut amidst improved economic outlook and reduced recession fears.
The Euro’s performance against other major currencies today shows a stronger position against the Japanese Yen, reflecting market sentiment and potential currency movements. Technical analysis for EUR/USD indicates a slight gain above the 1.0900 support level, with potential for further upside if the pair breaks above key resistance levels. A breakout could lead to a bullish momentum triggering higher price movements, while a downside move below key support levels may result in a decline towards previous lows.
Overall, market movements in the EUR/USD pair are likely to be influenced by upcoming US inflation data, ECB policy decisions, and economic indicators from the Eurozone. Traders are advised to monitor key support and resistance levels, as well as technical indicators for potential trading opportunities. With a focus on economic data releases and central bank policies, the currency pair is expected to experience volatility and potential price fluctuations in the near term.
