EUR/USD Showed Upside Momentum amid Cooling US Inflation
EUR/USD Showed Upside Momentum amid Cooling US Inflation
EUR/USD experienced an upward trajectory on Friday as US Dollar bears capitalized on the news of inflation showing signs of cooling in June, based on Personal Consumption Expenditure data. Despite this, the DXY managed to secure its second consecutive week of gains, driven by stronger-than-expected US economic indicators.
By the end of the trading day on Wall Street, EUR/USD had gained about 0.43%, rising from a low of 1.0943 to reach a high of 1.1047. However, analysts expressed caution regarding the rally initiated from the May monthly low, as it seemed susceptible to potential vulnerabilities. Should key US data next week fail to support the bullish trend, long positions might face a squeeze.
Looking ahead to the coming week, multiple central bank decisions await, including live meetings at the Reserve Bank of Australia and the Bank of England. Meanwhile, the spotlight will remain on US data, especially key employment indicators like Nonfarm Payrolls. Additionally, Canada and New Zealand will be releasing their job market data, while Eurostat will present inflation and growth figures.
To prepare for the next week, here are some key events and data to keep in mind:
Following the FOMC meeting, the focus in the US will shift to jobs data. Tuesday will bring the JOLTS Job Openings report, followed by ADP Private Employment on Wednesday, and the weekly Jobless Claims and Unit Labor Cost on Thursday. Friday will mark the highlight of the week with the release of Nonfarm Payrolls. Market expectations suggest that the economy is likely to have added 180,000 jobs in July, with the Unemployment Rate remaining at 3.6%. Additionally, relevant to the market will be the ISM Manufacturing PMI on Tuesday and the ISM Service PMI on Thursday.
The US Dollar demonstrated strength during the week and emerged as one of the top-performing currencies, thanks to positive US economic data. For the rally to sustain, the Greenback would require another round of encouraging numbers. The DXY achieved its second weekly gain after Thursday's rally, prompted by robust US GDP data, and managed to close above 101.50. While the technical outlook is not entirely clear, the US Dollar continues to recover from its one-year lows.
US Treasury yields concluded the week on a higher note, providing support to the US Dollar. The 10-year yield briefly surpassed 4.0% before retracing, while the 2-year yield settled around 4.9%. Similarly, Eurozone bond yields also experienced an increase, albeit at a more moderate pace. Technically, EUR/USD rebounded from the 50% Fibonacci level from the lower swing, indicating potential further movement.
TurnAround Point:1.0830
Our preference
Long positions above 1.0830 with targets at 1.11500 & 1.12800 in extension.
EUR/USD experienced an upward trajectory on Friday as US Dollar bears capitalized on the news of inflation showing signs of cooling in June, based on Personal Consumption Expenditure data. Despite this, the DXY managed to secure its second consecutive week of gains, driven by stronger-than-expected US economic indicators.
By the end of the trading day on Wall Street, EUR/USD had gained about 0.43%, rising from a low of 1.0943 to reach a high of 1.1047. However, analysts expressed caution regarding the rally initiated from the May monthly low, as it seemed susceptible to potential vulnerabilities. Should key US data next week fail to support the bullish trend, long positions might face a squeeze.
Looking ahead to the coming week, multiple central bank decisions await, including live meetings at the Reserve Bank of Australia and the Bank of England. Meanwhile, the spotlight will remain on US data, especially key employment indicators like Nonfarm Payrolls. Additionally, Canada and New Zealand will be releasing their job market data, while Eurostat will present inflation and growth figures.
To prepare for the next week, here are some key events and data to keep in mind:
Following the FOMC meeting, the focus in the US will shift to jobs data. Tuesday will bring the JOLTS Job Openings report, followed by ADP Private Employment on Wednesday, and the weekly Jobless Claims and Unit Labor Cost on Thursday. Friday will mark the highlight of the week with the release of Nonfarm Payrolls. Market expectations suggest that the economy is likely to have added 180,000 jobs in July, with the Unemployment Rate remaining at 3.6%. Additionally, relevant to the market will be the ISM Manufacturing PMI on Tuesday and the ISM Service PMI on Thursday.
The US Dollar demonstrated strength during the week and emerged as one of the top-performing currencies, thanks to positive US economic data. For the rally to sustain, the Greenback would require another round of encouraging numbers. The DXY achieved its second weekly gain after Thursday's rally, prompted by robust US GDP data, and managed to close above 101.50. While the technical outlook is not entirely clear, the US Dollar continues to recover from its one-year lows.
US Treasury yields concluded the week on a higher note, providing support to the US Dollar. The 10-year yield briefly surpassed 4.0% before retracing, while the 2-year yield settled around 4.9%. Similarly, Eurozone bond yields also experienced an increase, albeit at a more moderate pace. Technically, EUR/USD rebounded from the 50% Fibonacci level from the lower swing, indicating potential further movement.
TurnAround Point:1.0830
Our preference
Long positions above 1.0830 with targets at 1.11500 & 1.12800 in extension.
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