Forex Analysis by Fawad Razaqzada covering: EUR/USD, US Dollar Index Futures, US Dollar Index. Read Fawad Razaqzada's latest article on Investing.com
pair will remain in focus heading into the second half of Wednesday’s session and the week. This morning's stronger-than-expected Eurozonerelease has made a potential September rate cut from the ECB a closer call, easing pressure on the euro. The euro gained against most major currencies, except theThis morning's slightly stronger Eurozone inflation data and weaker US ADP private payrolls report have provided a boost to the EUR/USD .
Economists predict 177,000 net NFP job gains for July, with the unemployment rate steady at 4.1%. If the unemployment rate rises or job growth slows, expectations of three rate cuts by December could be reinforced, weakening the dollar and supporting the EUR/USD. Conversely, stronger US employment data could pressure the EUR/USD.Today's Eurozone inflation data showed a slight price uptick. The year-on-year increase in the Harmonized Index of Consumer Prices rose to 2.6% in July from 2.
Even if European inflation declines faster in the coming months, its impact on the euro is uncertain. Much of the downside risk from declining confidence indicators and weak Eurozone economic data is already priced in. Economic data would need to deteriorate sharply for the euro to weaken significantly. Today's German job market data showed an unexpected 18,000 increase in unemployed Germans in June, and German import prices unexpectedly rose by 0.
If EUR/USD fails to hold within this range, a deeper correction towards the low 1.07s could occur. However, if bullish momentum returns as anticipated, the pair might initially target the 1.0900 resistance level, with 1.0950 as the next potential stop.This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way.
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