The EUR/USD pair saw a decrease on Friday, marking the third consecutive day of losses. This downward movement was influenced by the release of EU inflation numbers, which failed to make a significant impact. On the other hand, US Personal Consumption Expenditure Price Index (PCE) data remained in line with expectations, keeping the market’s focus on the upcoming Federal Reserve rate decision on September 18.
The latest PCE figures for July showed no major surprises, with core PCE inflation holding steady at 0.2% month-on-month and 2.5% year-on-year. Market sentiment currently indicates a 30% probability of a 50 basis point cut by the Fed, with the remaining 70% expecting a quarter-point reduction. Overall, traders are anticipating a total of 100 basis points in cuts by 2024.
Looking ahead, the next key economic data point to watch is the Nonfarm Payrolls (NFP) report, scheduled for release next week. This data will play a crucial role in shaping the Fed’s decision on interest rates, with markets closely monitoring the outcome. Additionally, US exchanges will be closed for the Labor Day holiday at the start of the week, adding to the overall quiet trading atmosphere.
EUR/USD Price Forecast
The EUR/USD pair is currently experiencing a bearish pullback, with the price action approaching the 50-day Exponential Moving Average (EMA) at around 1.0950. While the pair remains above the 200-day EMA at 1.0855, recent declines from yearly highs suggest a potential shift towards bearish momentum.
EUR/USD Daily Chart
For those interested in the Euro and its impact on the market, here are some frequently asked questions:
- What is the Euro and how does it affect global transactions?
- What role does the European Central Bank (ECB) play in managing the Eurozone economy?
- How does Eurozone inflation data influence the Euro’s value?
- What economic indicators should investors watch to gauge the Euro’s performance?
- Why is the Trade Balance important for the Euro’s strength?
Understanding these key points can help investors navigate the complex world of currency trading and make informed decisions based on the latest economic data.