EUR/USD gains ground as market sentiment leans back into rate cut expectations


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  • EUR/USD
    extended
    a
    recovery
    from
    the
    early
    week’s
    slump
    toward
    1.0800.

  • Rate
    cut
    expectations
    continue
    to
    drive
    broader
    market
    flows.

  • EU
    data
    remains
    thin,
    US
    inflation
    figures
    to
    be
    key
    print
    for
    the
    week.

EUR/USD
found
some
room
on
the
high
side
on
Wednesday,
getting
pushed
up
the
charts
by
broad-market
Greenback
selling.

Market
sentiment

has
firmly
recovered
and
leaned
into
renewed
rate
cut
expectations
after
Federal
Reserve
(Fed)

Chairman
Jerome
Powell

gave
his
own
version
of
a
dovish
appearance
while
giving
two-day
testimony
to
US
Congressional
committees.
EU
data
remains
thin
outside
of
final
German
Harmonized
Index
of
Consumer
Prices
(HICP)
inflation
slated
for
Thursday,
and
markets
will
be
pivoting
to
face
a
double-header
of
key
US
inflation
data
due
on
Thursday
and
Friday.



Forex

Today: Gearing
up
for
US
CPI

German
final
HICP
inflation
numbers
are
due
during
Thursday’s
European
market
session,
but
little
change
is
expected
and
the
annualized
figure
for
June
is
broadly
expected
to
hold
steady
at
2.5%.

The
markets,
eager
for
a
rate
cut,
interpreted
Fed
Chair
Powell’s
appearances
before
Congressional
committees
as
dovish
this
week.
Powell
cautiously
acknowledged
recent
progress
on
inflation,
prompting
a
recovery
in
risk
appetite
as
investors
once
again
hope
for
a
rate
cut
in
September.
Investors
will
be
watching
for
lower-than-expected
US
CPI
inflation
on
Thursday,
with
the
median
market
forecast
expecting
annualized
core
CPI
inflation
in
June
to
remain
at
3.4%.

Further
US
inflation
data
is
scheduled
for
release
on
Friday,
including
the
core
US
Producer
Price
Index
(PPI)
wholesale
inflation.
The
index
is
expected
to
increase
to
2.5%
YoY
from
the
previous
2.3%,
which
could
impact
broad-market
rate
cut
expectations.

Euro
PRICE
Today

The
table
below
shows
the
percentage
change
of
Euro
(EUR)
against
listed
major
currencies
today.
Euro
was
the
strongest
against
the
Canadian
Dollar.

  USD EUR GBP JPY CAD AUD NZD CHF
USD   -0.01% -0.03% -0.05% -0.02% -0.06% -0.09% -0.05%
EUR 0.01%   -0.01% -0.02% 0.02% -0.03% -0.06% -0.03%
GBP 0.03% 0.00%   -0.02% 0.02% -0.03% -0.07% -0.01%
JPY 0.05% 0.02% 0.02%   0.02% -0.01% -0.08% 0.00%
CAD 0.02% -0.02% -0.02% -0.02%   -0.06% -0.10% -0.03%
AUD 0.06% 0.03% 0.03% 0.01% 0.06%   -0.04% 0.02%
NZD 0.09% 0.06% 0.07% 0.08% 0.10% 0.04%   0.06%
CHF 0.05% 0.03% 0.00% -0.01% 0.03% -0.02% -0.06%  

The
heat
map
shows
percentage
changes
of
major
currencies
against
each
other.
The
base
currency
is
picked
from
the
left
column,
while
the
quote
currency
is
picked
from
the
top
row.
For
example,
if
you
pick
the
Euro
from
the
left
column
and
move
along
the
horizontal
line
to
the
US
Dollar,
the
percentage
change
displayed
in
the
box
will
represent
EUR
(base)/USD
(quote).

EUR/USD
technical
outlook

EUR/USD
gave
a
thin
intraday
recovery,
but
bullish
momentum
remains
on
the
anemic
side
and
bids
are
struggling
to
make
further
headway
while
weighed
down
by
a
near-term
ceiling
around
1.0840.

Daily
candlesticks
continue
to
get
squeezed
between
the
upper
bound
of
a
rough
descending
channel
and
the
200-day
Exponential
Moving
Average
(EMA)
at
1.0790.
Without
a
definitive
bullish
break
into
fresh
topside
chart
territory,
price
action
is
likely
to
get
swamped
out
and
begin
making
a
fresh
leg
lower.

EUR/USD
hourly
chart

EUR/USD
daily
chart

Euro
FAQs

The
Euro
is
the
currency
for
the
20
European
Union
countries
that
belong
to
the
Eurozone.
It
is
the
second
most
heavily
traded
currency
in
the
world
behind
the
US
Dollar.
In
2022,
it

accounted

for
31%
of
all
foreign
exchange
transactions,
with
an
average
daily
turnover
of
over
$2.2
trillion
a
day.
EUR/USD
is
the
most
heavily
traded
currency
pair
in
the
world,

accounting

for
an
estimated
30%
off
all
transactions,
followed
by
EUR/JPY
(4%),
EUR/GBP
(3%)
and
EUR/AUD
(2%).

The
European
Central
Bank
(ECB)
in
Frankfurt,
Germany,
is
the
reserve
bank
for
the
Eurozone.
The
ECB
sets
interest
rates
and
manages
monetary
policy.
The
ECB’s
primary
mandate
is
to
maintain
price
stability,
which
means
either
controlling
inflation
or
stimulating
growth.
Its
primary
tool
is
the
raising
or
lowering
of
interest
rates.
Relatively
high
interest
rates

or
the
expectation
of
higher
rates

will
usually
benefit
the
Euro
and
vice
versa.
The
ECB
Governing
Council
makes
monetary
policy
decisions
at
meetings
held
eight
times
a
year.
Decisions
are
made
by
heads
of
the
Eurozone
national
banks
and
six
permanent
members,
including
the
President
of
the
ECB,
Christine
Lagarde.

Eurozone
inflation
data,
measured
by
the
Harmonized
Index
of
Consumer
Prices
(HICP),
is
an
important
econometric
for
the
Euro.
If
inflation
rises
more
than
expected,
especially
if
above
the
ECB’s
2%
target,
it
obliges
the
ECB
to
raise
interest
rates
to
bring
it
back
under
control.
Relatively
high
interest
rates
compared
to
its
counterparts
will
usually
benefit
the
Euro,
as
it
makes
the
region
more
attractive
as
a
place
for
global
investors
to
park
their
money.

Data
releases
gauge
the
health
of
the
economy
and
can
impact
on
the
Euro.
Indicators
such
as
GDP,
Manufacturing
and
Services
PMIs,
employment,
and
consumer
sentiment
surveys
can
all
influence
the
direction
of
the
single
currency.
A
strong
economy
is
good
for
the
Euro.
Not
only
does
it
attract
more
foreign
investment
but
it
may
encourage
the
ECB
to
put
up
interest
rates,
which
will
directly
strengthen
the
Euro.
Otherwise,
if
economic
data
is
weak,
the
Euro
is
likely
to
fall.
Economic
data
for
the
four
largest
economies
in
the
euro
area
(Germany,
France,
Italy
and
Spain)
are
especially
significant,
as
they
account
for
75%
of
the
Eurozone’s
economy.

Another
significant
data
release
for
the
Euro
is
the
Trade
Balance.
This
indicator
measures
the
difference
between
what
a
country
earns
from
its
exports
and
what
it
spends
on
imports
over
a
given
period.
If
a
country
produces
highly
sought
after
exports
then
its
currency
will
gain
in
value
purely
from
the
extra
demand
created
from
foreign
buyers
seeking
to
purchase
these
goods.
Therefore,
a
positive
net
Trade
Balance
strengthens
a
currency
and
vice
versa
for
a
negative
balance.