EUR/USD Gains Amid Slowing US Inflation and Negative Dollar Mom.
EUR/USD Continues Impressive Rally: Dollar Sell-Off Boosts Pair for Sixth Consecutive Day
The EUR/USD currency pair extended its upward trajectory for the sixth consecutive day, displaying unwavering strength fueled by another bout of US Dollar selling. US inflation data further substantiated the notion of a slowdown, intensifying the negative momentum surrounding the Dollar. This persistent weakness in the Dollar suggests the potential for additional gains; however, the magnitude of the rally indicates the likelihood of some consolidation or a modest correction.
The European Central Bank (ECB) recently unveiled the minutes of its latest meeting, revealing that the Governing Council contemplated the possibility of raising interest rates beyond July if deemed necessary. This aligns with recent statements from President Lagarde, and the market has already priced in a rate hike for July. On Thursday, data disclosed a 0.2% expansion in Industrial Production across the Eurozone in May, slightly below the market consensus of 0.3%. The European Commission is set to release economic growth forecasts and trade balance data on Friday.
The primary catalyst in the market remains the persistent weakness of the US Dollar, as it struggles to find support amidst its decline. The DXY index plummeted below 100.00 for the first time in a year. Both US and Eurozone yields continue their descent, reflecting the market's anticipation of an approaching end to the hiking cycle.
Similar to the US Consumer Price Index, the Producer Price Index provided further evidence of a deceleration in inflation, triggering additional losses for the Dollar. The annual PPI rate declined from 0.9% to 0.1%, while the Core rate dropped from 2.8% to 2.4%. Consumer Confidence data is scheduled for release on Friday, which could further influence market sentiment.
Pivot Point 1.1180
Our preferred Scenario
Long positions above 1.1180 with targets at 1.1240 & 1.1260 in extension.
The EUR/USD currency pair extended its upward trajectory for the sixth consecutive day, displaying unwavering strength fueled by another bout of US Dollar selling. US inflation data further substantiated the notion of a slowdown, intensifying the negative momentum surrounding the Dollar. This persistent weakness in the Dollar suggests the potential for additional gains; however, the magnitude of the rally indicates the likelihood of some consolidation or a modest correction.
The European Central Bank (ECB) recently unveiled the minutes of its latest meeting, revealing that the Governing Council contemplated the possibility of raising interest rates beyond July if deemed necessary. This aligns with recent statements from President Lagarde, and the market has already priced in a rate hike for July. On Thursday, data disclosed a 0.2% expansion in Industrial Production across the Eurozone in May, slightly below the market consensus of 0.3%. The European Commission is set to release economic growth forecasts and trade balance data on Friday.
The primary catalyst in the market remains the persistent weakness of the US Dollar, as it struggles to find support amidst its decline. The DXY index plummeted below 100.00 for the first time in a year. Both US and Eurozone yields continue their descent, reflecting the market's anticipation of an approaching end to the hiking cycle.
Similar to the US Consumer Price Index, the Producer Price Index provided further evidence of a deceleration in inflation, triggering additional losses for the Dollar. The annual PPI rate declined from 0.9% to 0.1%, while the Core rate dropped from 2.8% to 2.4%. Consumer Confidence data is scheduled for release on Friday, which could further influence market sentiment.
Pivot Point 1.1180
Our preferred Scenario
Long positions above 1.1180 with targets at 1.1240 & 1.1260 in extension.
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