EUR/USD remains below 1.1200 as investors shift their focus to upcoming inflation data from the Eurozone and the US. The European Central Bank (ECB) is expected to implement two more interest rate cuts by the end of the year, while the Federal Reserve’s Mary Daly signals a 25-basis-points interest-rate reduction in September.
In Tuesday’s European session, the US Dollar struggles to gain ground as it hovers below 101.00 on the US Dollar Index (DXY). The core Personal Consumption Expenditure Price Index (PCE) data for July, set to be released on Friday, will provide insights into the potential pace of interest rate cuts by the Federal Reserve in September.
Market expectations are split between a 50-basis points rate reduction and a 25-basis points cut, with most signs pointing towards the latter. San Francisco Fed Bank President Mary Daly emphasizes the need for interest rate cuts to address emerging risks in the job market.
Market Analysis: EUR/USD Consolidates as ECB and Fed Interest Rate Cuts Loom
- EUR/USD trades below 1.1200 as investors await further clarity on potential interest rate cuts by the ECB and the Fed.
- Speculation is rife about additional ECB rate cuts in the last quarter of the year, fueled by easing price pressures in the Eurozone.
- The upcoming release of Eurozone inflation data for August will shed light on the economic outlook and the possibility of further rate cuts.
Technical Analysis: EUR/USD Sideways Movement Below 1.1200
EUR/USD consolidates below 1.1200 after a recent swing high, with the potential for further upside supported by the Symmetrical Triangle breakout on the weekly chart. The 10-week EMA at 1.0940 acts as a key support level, while the RSI indicates strong bullish momentum.
Overall, the focus remains on inflation data and central bank policies, with potential interest rate cuts impacting currency movements in the near term.