US PCE Price Index Overview
Friday's US economic docket highlights the release of the March Personal Consumption Expenditure (PCE) Price Index, scheduled later during the early North American session at 12:30 GMT. The headline gauge is expected to edge higher from 6.4% YoY in February to 6.5% during the reported month. The core reading, however, is anticipated to have eased to 5.3% YoY in March from 5.4% previous and rose 0.3% on a monthly basis, down from 0.4% in February.
How Could it Affect EUR/USD?
Ahead of the key release, a sharp US dollar corrective pullback assisted the EUR/USD pair to snap a six-day losing streak to its lowest level since January 2017 touched the previous day. That said, expectations that the Fed would adopt a more aggressive policy response to curb soaring inflation should act as a tailwind for the buck. Stronger PCE figures will reinforce market bets and provide a fresh lift to the greenback.
Conversely, softer-than-expected readings might prompt traders to continue unwinding their USD bullish bets and offer additional support to the major, though any meaningful recovery still seems elusive. Concerns about the economic fallout from the ongoing Ukraine crisis might hold back traders from placing aggressive bullish bets around the shared currency. This, in turn, suggests that any further move up is more likely to attract fresh sellers and runs the risk of fizzling out rather quickly.
Eren Sengezer, Editor at FXStreet, outlined important technical levels to trade the EUR/USD pair: “The Fibonacci 23.6% retracement of the latest trend seems to have formed a key resistance level at 1.0600. In case the pair rises above that level and makes a four-hour close there, the next recovery target could be seen at 1.0660 (Fibonacci 38.2% retracement) ahead of 1.0700 (Fibonacci 50% retracement, 50-period SMA on the four-hour chart).”
“Ideally, the Relative Strength Index (RSI) indicator, which is currently located at around 40, would rise above 50 in such a move, possibly attracting additional buyers. On the downside, interim support aligns at 1.0520 (static level) before 1.0500 (psychological level) and 1.0470 (multi-year low set on April 28),” Eren added further.
Key Notes
• EUR/USD Forecast: Euro eyes 1.0660 as next recovery target
• US Dollar Index comes under pressure near 103.00 ahead of PCE
• EUR/USD: Limited correction to 1.0560/70, with outside risk to 1.0650 – ING
About the US PCE Price Index
The Personal Spending released by the Bureau of Economic Analysis, Department of Commerce is an indicator that measures the total expenditure by individuals. The level of spending can be used as an indicator of consumer optimism. It is also considered as a measure of economic growth: While Personal spending stimulates inflationary pressures, it could lead to raise interest rates. A high reading is positive (or Bullish) for the USD.
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 regains traction above 1.1000 ahead of US CPI release
EUR/USD has found fresh buyers and jumps above 1.1000 in the European session on Thursday. The pair gains on the German coalition deal and Trump's 90-day pause on reciprocal tariffs, which have lifted risk senitment while exacerbating the US Dollar pain ahead of the US CPI data release.
GBP/USD trades firm above 1.2850, US CPI data awaited
GBP/USD sustains the rebound above 1.2850 in European trading hours on Thursday. The British Pound capitalizes on risk appetite, courtesy of Trump's tariff pause, allowing the pair to recover ground. But further upside hinges on the US CPI data and US-Sino trade updates.
Gold price enters hotspot region with new all-time high possible
Gold price is delivering a jaw-breaking performance this Thursday in the early trading session, moving around $3,107 at the time of writing. Since Tuesday morning, the precious metal has rallied nearly 5.00%. The main driver for the rally came from the United States President Donald Trump who announced a 90-day pause to higher tariffs on 56 countries and the European Union, which will now be taxed at the 10% baseline rate.
US CPI data set to reveal March inflation dip as markets weigh impact of Trump’s tariffs
As measured by the CPI, inflation in the US is set to rise at an annual pace of 2.6% in March, down slightly from the 2.8% reported in February. Core CPI inflation, which excludes the volatile food and energy categories, is expected to ease to 3% in the same period from a year earlier
Trump’s tariff pause sparks rally – What comes next?
Markets staged a dramatic reversal Wednesday, led by a 12% surge in the Nasdaq and strong gains across major indices, following President Trump’s unexpected decision to pause tariff escalation for non-retaliating trade partners.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.