- The EUR/USD outlook shows steady Eurozone consumer inflation expectations.
- Consumers expect Eurozone inflation to average 2.6% in the next year.
- The preliminary US GDP revealed a 3.3% expansion, bigger than the forecast of 3.1%.
The EUR/USD outlook shows the euro recovering after an ECB survey revealed steady consumer inflation expectations. However, the currency pulled back in the previous session after upbeat US data briefly boosted the dollar.
An ECB survey revealed that consumers expect Eurozone inflation to average 2.6% in the next year. This was unchanged from the June expectations. Moreover, it means that the European Central Bank can maintain the interest rates at 2.0%. Therefore, traders do not expect a rate cut in September.
Meanwhile, the dollar got some relief in the previous session after data revealed solid economic growth. The preliminary GDP revealed a 3.3% expansion, bigger than the forecast of 3.1%. The data eased some recent concerns about the state of the economy. It also eased pressure on the Fed to lower borrowing costs. Additionally, unemployment claims fell more than expected, easing worries about a rapid slowdown in the labor market.
Nevertheless, the greenback is heading for a monthly loss against the euro due to an increase in Fed rate cut expectations. Traders are now looking forward to the nonfarm payrolls report next week that will continue to shape the outlook for rate cuts.
EUR/USD key events today
- US core PCE price index m/m
EUR/USD technical outlook: Bears attempt again at range resistance
On the technical side, the EUR/USD price trades above the 30-SMA, with the RSI above 50, suggesting a bullish bias. However, on a larger scale, the price trades in a consolidation between the 1.1600 support and the 1.1700 resistance levels.
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Initially, the trend turned bullish after meeting the 1.1400 support level. However, it soon started a corrective phase after bulls failed to break above the 1.1700 key resistance level. Since then, they have made several attempts to break out of the consolidation but have failed. At the same time, the RSI has made lower highs, indicating fading bullish momentum.
If bulls regain strength, the price might finally break out of consolidation and continue the uptrend. On the other hand, if they don’t, bears might take over and retest the 1.1400 support level.
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