- The EUR/USD turned to the downside after approaching 1.0950, falling below 1.0900.
- The US Dollar remains strong, supported by US economic data.
- Eurozone CPI and US Core PCE will be released on Friday.
The EUR/USD lost ground for the second day in a row on Thursday and dropped below 1.0900 on the back of a stronger US Dollar, which gained momentum from robust economic data. In the Eurozone, inflation data came in mixed, showing a slowdown in Spain and a rebound in Germany that did not surprise.
Data released on Thursday showed that German inflation rose slightly in June, with the annual rate increasing from 6.1% to 6.4%. Analysts pointed out that the increase was attributed to cuts in energy prices and transportation costs, without which the inflation rate would have fallen. Looking into the details, the slowdown in inflation appears to remain in place. On Friday, the Eurozone Consumer Price Index data is due. European Central Bank officials made it clear that a rate hike is coming in July, as inflation remains stubbornly high.
Federal Reserve Chair Powell reiterated his hawkish message on Thursday, stating that most policymakers expect more rate hikes this year. Adding to those comments, economic data from the US came in above expectations, with Initial Jobless Claims dropping from the highest level since 2021 to the lowest level in four weeks at 239K. A key report is due on Friday, the Core Personal Consumption Expenditure Index, which is the Fed's preferred inflation indicator. Numbers above expectations could cement a rate hike from the Fed at the next meeting.
EUR/USD short-term technical outlook
-638236656812564332.png)
The EUR/USD lost ground for the second day in a row but held above the 20-day Simple Moving Average (SMA). The pair still trades within a range, now below 1.0900 and testing the 1.0860 support area. A consolidation below this level would set up more losses for the Euro, potentially targeting 1.0800.
Risks in the short term are tilted to the downside. Technical indicators in the daily and 4-hour charts are moving south, supporting bearish pressure and suggesting another test of 1.0860. The bearish pressure will remain intact while under 1.0900. The Euro needs to surpass the 20-period SMA in the 4-hour chart and the 1.0920 zone to gain support.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD hovers around 1.0800 on Fed's decision
EUR/USD returned to the 1.0800 price zone after the Federal Reserve announced its decision to cut the benchmark interest rate by 25 bps as widely anticipated. Chair Jerome Powell's remarks put mild pressure on the US Dollar.
USD/JPY retreats from weekly highs as FOMC delivers 25 bps rate trim
USD/JPY hovers around 153.80 after the Fed broadly met market expectations on November's rate call. The Fed delivered a follow-up quarter-point cut on Thursday; markets now bet on the odds of a December three-peat.
Gold regains $2,700 with Fed’s announcement
Gold extends its recovery following Wednesday's sharp decline and trades above $2,700, as the US Dollar eases following the Federal Reserve's decision to cut rates by 25 bps. Powell's speech revolved around Trump's victory.
Ethereum Price Forecast: ETH eyes $3,366 as open interest growth could fuel quest for new all-time high
Ethereum (ETH) is up nearly 8% on Thursday and could reach a new all-time high before year-end following increasing investor demand for the top altcoin. This is visible in ETH's open interest growth and increasing Ethereum exchange-traded funds (ETF) inflows.
Outlook for the markets under Trump 2.0
On November 5, the United States held presidential elections. Republican and former president Donald Trump won the elections surprisingly clearly. The Electoral College, which in fact elects the president, will meet on December 17, while the inauguration is scheduled for January 20, 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.