The EUR/USD pair has bounced back to near 1.0850 in Thursday’s European session, defying the uncertain near-term outlook for the Euro. The European Central Bank (ECB) is expected to implement more rate cuts this year, with concerns over German economic prospects adding to the uncertainty.
Recent data shows a sharp decline in Eurozone business activity, particularly in Germany, the bloc’s largest economy. This has led to expectations of further interest rate cuts to stimulate economic growth. The German government has announced tax relief measures for households and corporations to boost overall consumption.
Daily Digest: EUR/USD Recovers Amid Uncertain Euro Outlook
- EUR/USD rises near 1.0850 as the US Dollar shows weakness ahead of the US Q2 flash GDP release. The US Dollar Index (DXY) remains below the weekly high of 104.50.
- US Q2 GDP expected to grow at a faster pace of 2.0%, boosting expectations of Federal Reserve (Fed) rate cuts. Fed likely to cut rates twice this year.
- Focus on Durable Goods Orders for June and Personal Consumption Expenditures Price Index (PCE) data for further market impact.
Technical Analysis: EUR/USD Hovers Near 20-Day EMA
EUR/USD is back inside the Symmetrical Triangle pattern on the daily chart, below the 20-day Exponential Moving Average (EMA) at 1.0840. Further downside towards support levels at 1.0800 and 1.0700 is possible.
RSI indicator suggests fading bullish momentum, with resistance at 1.0900 for Euro bulls.
Analysis Breakdown:
The Euro has rebounded against the US Dollar, despite uncertainties in the Eurozone economy. Factors such as expected ECB rate cuts, weak German economic data, and US Q2 GDP growth projections are influencing market sentiment.
Investors are closely watching key data releases and central bank decisions for further direction in the EUR/USD pair. Traders should pay attention to economic indicators and geopolitical developments to make informed decisions in the volatile forex market.