EUR/USD – A Downtrend May Happen For The Pair Ahead Of Eu Inflation Data
Bullish View
- Take Profit: 1.0960
- Stop Loss : 1.1075
- Timeline: 1-2 days
Bearish View
- Buy Stop : 1.1048
- Take Profit: 1.1100
- Stop Loss : 1.0970
On Monday morning, the major pair was seen trading at 1.1018 which was a little higher than the low point of last week when the price was 1.0945. Trades seemed to be making slow moves as they were still trying to assess the impact of the recent announcements from ECB as well as Federal Reserve. Both major economies saw a rate hike of 0.25% to curb the high inflation. But since we can see a drop in inflation rates, the rate hikes may finally come to an end. The US PCE index was also revealed on Friday, and this data was relevant for the market as it will be taken into account by the Federal Reserve. The core PCE has dropped to 4.1% and the report for the month of June has recorded it to be 3.1%.
This is another reason for analysts to anticipate a pause in rate hikes for the upcoming months. The next data release to look forward to would be the German Import price Index. Apparently, the index had recorded a drop of 9.1% in the last report and economists are expecting the index to decline by 14.7% during June. The retail sales numbers yet to be published by Germany may also show signs of weakness as per experts. The slowness in EU economies may get revealed after the actual numbers are released. Along with that the European preliminary CPI data will also be published which is also crucial for the pair. The headline CPI was 5.5% in June and economists are expecting it to come down to 5.3% in July.
But these figures won’t have much influence as of now since they will only be released after the ECB decisions. The impact of Fed and ECB decisions was evident on the price charts as well since we witnessed the pair price forming a bearish crossover and flipping the key support level of 1.1073 into resistance. This was also the peak price in April which makes it relevant. There was also movement between the middle and lower lines of Bollinger Bands with the pair moving below the 50 period MA. Hence, the probability of the EUR/USD pair