EUR/USD Awaits ADP Data!

3 июл.

EUR/USD Analysis

Current Overview
EUR/USD is retreating towards 1.0700 during the European session on Wednesday. The pair is under pressure as the US Dollar finds stability after dovish comments from Fed Chair Powell. Cooling inflation in the EU keeps the Euro under pressure. Eyes are on the US ADP report and Fed Minutes.

Key Support and Resistance Levels
Support: 1.0650
Resistance: 1.0780
Recent Trends and Outlook
Euro Weakness: Primarily due to cooling inflation in the EU and comments from the ECB about further rate cuts.
US Dollar Strength: Supported by more hawkish comments from Fed officials and the possibility of a rate cut in December.
Recent Trading Range: 1.0730-1.0740, reflecting a consolidation phase.

Fundamental Analysis
Eurozone: The ECB is considering further rate cuts by the end of the year, with inflation at 2.5% YoY and core inflation at 2.9%.
United States: Debates on one or two rate cuts by the end of the year, with a 69% probability for a cut in September and 95% for December, according to the CME Group's FedWatch Tool.

Political and Economic Factors
ECB Forum in Sintra: Discussions between Lagarde and Powell. Lagarde highlighted progress in Eurozone disinflation, while Powell emphasized the need for more data before deciding on rate cuts.
French Elections: The upcoming round of elections in France could further influence the EUR/USD pair, introducing short-term volatility.

Short-Term Outlook
Bearish Risk: If bears regain control, EUR/USD could test the June low of 1.0665.
Bullish Potential: Renewed strength could bring the pair towards the 200-day moving average at 1.0790. A breakout of this level could focus on the March peak at 1.0981 and the January weekly high at 1.0998, with the psychological level of 1.1000 in sight.