The US Dollar has continued to rise after reports confirmed the strength of the US economy. However, upcoming meetings of the European Central Bank and Federal Reserve are causing some caution in the markets.
The EUR/USD pair struggled to surpass the 1.1200 mark and eventually entered a downward trend, ending the week just above the 1.1053 low.
US Economy Shows Resilience
Positive macroeconomic data from the US, including better-than-expected GDP growth, lower unemployment claims, and steady PCE Price Index numbers, have boosted the US Dollar. Despite expectations of an interest rate cut by the Federal Reserve, the strong economic indicators have supported the USD currency.
Eurozone Inflation Data Influences ECB’s Decision
In the Eurozone, inflation figures have also played a role in market sentiment. Germany’s CPI and HICP data came in below expectations, supporting the case for an ECB rate cut. Investors are already pricing in the possibility of a rate cut in September.
Upcoming Economic Data
Key economic releases in the upcoming week will shape market expectations ahead of central bank meetings. The US will see data on manufacturing PMI, services PMI, employment figures, and more. The Eurozone will also release important economic indicators, including PPI, retail sales, and GDP updates.
EUR/USD Technical Analysis
Technical indicators suggest a potential decline in the EUR/USD pair, with support levels at 1.0990, 1.0950, and 1.0910. Resistance levels are at 1.1100, 1.1145, and 1.1200. The overall outlook points towards a bearish trend in the near term.