EUR/USD Forecast Nears 1.10 Amidst Key Data

Key Points

• The EUR/USD forecast is near 1.0950, with recent activities suggesting a consolidation point around 1.0930.
• Key buyer levels are set above 1.0980, targeting the 1.10 mark.
• Upcoming US data, including PPI and Retail Sales, alongside interest rate speculations, play a pivotal role in the currency’s movements.
• Statements from US Treasury and ECB policymakers shed light on anticipated interest rate decisions and economic outlooks.
• Technical indicators highlight a bullish trend, with the 100 SMA crossing above the 200 SMA.

In the Asian session on Thursday, the EUR/USD pair hovered near 1.0950, reflecting a dynamic interplay between recent highs and consolidation points. The pair reached a high of 1.0980 last week, with a consolidation point around 1.0930, indicating a tug-of-war between buyers and sellers in the forex market. Key levels have emerged, with buyers eyeing positions above 1.0980 towards the 1.10 landmark, while sellers target the 1.09 round figure, seeking momentum gains below the 200-day Simple Moving Average (SMA) at 1.0830.

Inflation Data Fuels 67.2% Fed Rate Cut Bet.

Despite higher US Treasury yields spurred by positive inflation data, the US dollar’s performance significantly influences the EUR/USD’s trajectory. Market participants closely monitor upcoming US data, including the Core Producer Price Index (PPI) and Retail Sales, which could sway interest rate bets considerably. Current speculation suggests a 67.2% chance of US Feds rate cuts in June, whereas the ECB anticipates lower borrowing costs.

Yellen & ECB Set Tone for Future Rate Paths

Statements from notable figures such as US Treasury Secretary Janet Yellen and ECB policymakers, including Francois Villeroy de Galhau, provide insight into future monetary policies. Yellen’s comments on interest rates and President Biden’s budget plan signal a cautious but realistic approach to economic recovery. Consequently, policymakers note that the ECB’s rate adjustment readiness aligns with economic forecasts, significantly impacting the EUR/USD outlook.

Technical Trends: 100 SMA Crosses 200 SMA

Despite fluctuations, EUR/USD shows bullish signals, trading above its trendline and the 100 SMA surpassing the 200 SMA. These technical signals, market sentiment, and upcoming economic data suggest a cautiously optimistic forecast for the EUR/USD. Market participants remain vigilant and ready to navigate the intricacies of economic indicators, policy decisions, and technical cues.