26 Juli 2024, EUR/USD
Event to watch out for today:
15:30 GMT+3. USD - Core PCE Price Index
EURUSD:
The Euro-dollar pair is trading near 1.0860 during the Asian session on Friday, continuing to rise after rebounding from the two-week low of 1.0825 recorded on Wednesday. The rise in EUR/USD is attributed to a weaker US Dollar (USD) ahead of the release of the US Personal Consumption Expenditure (PCE) price index for June.
However, the US Dollar may limit its decline as stronger US economic data has reduced some expectations of a rate cut in September. On Thursday, US gross domestic product (GDP) for the second quarter (Q2) came in stronger than expected. This followed the US PMI data released on Wednesday, which pointed to an acceleration in private sector activity in July, indicating that growth in the US is resilient despite higher interest rates.
US GDP rose 2.8% on a seasonally adjusted and inflation-adjusted annualized basis from the previous reading of 1.4% and beat forecasts of 2%. In addition, the composite PMI rose to 55.0 from a previous reading of 54.8, the highest reading since April 2022 and indicative of steady growth over the past 18 months.
The Euro struggled as the European Central Bank's (ECB) near-term outlook remains uncertain due to strong expectations of additional rate cuts. The ECB is expected to cut interest rates two more times this year as price pressures are expected to remain at current levels for a year and only return to the bank's target level in 2025.
Trading recommendation: Trade predominantly with Buy orders from the current price level.
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