- As rate cut hopes persist, EUR/USD recovers from a near-term swing low near 1.0670.
- Investors shrug off cautious Fed tones to bet on September rate cut.
- EU economic data thin this week with mid-tier events, Friday’s global PMIs loom.
EUR/USD recovered to 1.0740 on Monday as market sentiment shifts back into rate cut hopes to kick off the new trading week, with investors shrugging off cautionary statements from Federal Reserve (Fed) officials that warned rate cuts may not materialize at a pace investors are happy with. US data will dominate financial headlines with Retail Sales slated for Tuesday, leaving markets shuffling in place until Friday’s global Purchasing Managers Index (PMI) figures update.
Pan-European economic figures are limited to mid-tier prints this week, leaving markets to focus on Tuesday’s upcoming US Retail Sales print. In May, US Retail Sales are expected to increase to 0.2% month-over-month after remaining flat at 0.0% in the previous month. Core Retail Sales, excluding automobile sales, are also anticipated to remain steady at 0.2%.
Read more: Fed policymakers warns that rates set to hold as the wait for more cooling inflation data continues
Throughout the week’s upcoming economic calendar, various Federal Reserve (Fed) officials are scheduled to make appearances, with a number of policymakers expressing a notably cautious stance on Monday. Although recent inflation data has shown a faster-than-expected decline, the Fed has emphasized a reluctance to implement premature rate cuts, emphasizing the need for further data before making any decisions.
Later in the week, EU and US PMI)figures scheduled for Friday are expected to split results, with market forecasts expecting a slight uptick in pan-EU activity and a slight decrease expected in US PMI figures.
EUR/USD technical outlook
EUR/USD recovered its footing on Monday, extending last Friday’s recovery from a near-term low around 1.0670. Despite intraday recovery, the Fiber remains on the low side, trading south of the 200-hour Exponential Moving Average (EMA) at 1.0770. A pattern of lower highs leaves EUR/USD at risk for a continued bearish slide.
Daily candlesticks remain firmly planted in bear country after tumbling back from the 200-day EMA at 1.0803. Bullish momentum is on pace to build a firmer bounce from recent lows below the 1.0700 handle, but pressure is mounting with a pattern of lower highs weighing on price action from December’s peak near 1.1140.
EUR/USD hourly chart
EUR/USD daily chart
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 holds near 1.0300 as traders await US NFP
EUR/USD trades in a tight channel at around 1.0300 in the European session on Friday. However, concerns over US President-elect Trump's policies and hawkish Fed expectations keep the US Dollar afloat ahead of the Nonfarm Payrolls data, capping the pair's upside.
GBP/USD struggles to stay above 1.2300, eyes on US jobs report
GBP/USD finds it difficult to gather recovery momentum after rising above 1.2300 earlier in the day. The pair remains vulnerable amid persistent US Dollar strength and the UK bond market turmoil. The focus now shifts to the US labor market data for fresh directives.
Gold climbs to fresh multi-week high above $2,680 ahead of US NFP
Gold price (XAU/USD) gains some follow-through positive traction for the fourth consecutive day and trades at its highest level in nearly a month above $2,680. Market focus shifts to US labor market data, which will feature Nonfarm Payrolls and wage inflation figures.
Nonfarm Payrolls forecast: US December job gains set to decline sharply from November
US Nonfarm Payrolls are expected to rise by 160K in December after jumping by 227K in November. US jobs data is set to rock the US Dollar after hawkish Fed Minutes published on Wednesday.
How to trade NFP, one of the most volatile events Premium
NFP is the acronym for Nonfarm Payrolls, arguably the most important economic data release in the world. The indicator, which provides a comprehensive snapshot of the health of the US labor market, is typically published on the first Friday of each month.
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.