EUR/USD Forecast: The dollar is not out of the woods yet

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1872

June US Core PCE inflation came in at 3.5% YoY, below expectations.
The EU Gross Domestic Product improved to 2% QoQ in the second quarter.
EUR/USD is mildly bullish in the near-term, but faces critical resistance at 1.1920.

The EUR/USD pair retreated on Friday from a multi-week high of 1.1908, ending the week with substantial gains around 1.1870. The greenback edged higher after US inflation data came in worse than anticipated, somehow suggesting easing inflationary pressures. The core PCE Price Index printed at 3.5% YoY in June, ticking higher from the previous 3.4% but below the 3.7% expected. Stocks gave up some of their weekly gains, weighing on high-yielding assets.

Also, Personal Income in the country was up 0.1%, while Personal Spending increased 1% in June, beating the market’s expectations. Earlier in the day, the EU reported the preliminary estimate of its Q2 Gross Domestic Product, which was up 2% QoQ, while the German figure printed at 1.5%, missing the market’s expectations. Profit-taking amid the month-end provided some support to the dollar.

On Monday, Germany will publish June Retail Sales, while Markit will release the final readings of its July PMIs. In the US, the focus will be on the July ISM Manufacturing PMI, foreseen at 60.8 from 60.6 previously.

EUR/USD short-term technical outlook

The EUR/USD pair is neutral-to-bullish in the daily chart, although below a critical Fibonacci level at 1.1920. The daily chart shows that it is advancing above a flat 20 SMA, currently providing dynamic support at around 1.1820. The longer moving averages remain directionless around the 1.2000 area, while technical indicators recovered ground but lost momentum and currently consolidate around their midlines. According to the 4-hour chart, the pair retains chances of recovering ground, as it settled above all of its moving averages, with the 20 SMA providing immediate support at 1.1850. Technical indicators hold within positive levels, although with uneven strength and well below weekly highs.

Support levels: 1.1850 1.1805 1.1750

Resistance levels: 1.1920 1.1960 1.2000

View Live Chart for the EUR/USD

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD holds above 1.1750 after mixed EU PMI data

EUR/USD manages to hold above 1.1750 but struggles to gather recovery momentum on Friday, following the mixed February PMI figures from Germany and the Eurozone. In the second half of the day, Q4 GDP, December inflation and February PMI data from the US will be watched closely by market participants.

GBP/USD recovers further toward 1.3500 after UK PMI data

GBP/USD is recovering ground further toward 1.3500 in European trading on Friday, helped by a modest uptick in the Pound Sterling after stronger-than-expected UK January Retail Sales and February PMI data. However, the pair's further upside could be limited amid persistent US Dollar strength as the focus turns to key US data.

Gold sticks to positive bias above $5,000 ahead of US data

Gold gains some positive traction for the third consecutive day on Friday. holding above $5,000. Traders now look forward to the key US macro releases – the Advance Q4 GDP report and the Personal Consumption Expenditures (PCE) Price Index – for fresh trading impetus.

US GDP growth expected to slow down significantly in Q4 after stellar Q3

The United States Bureau of Economic Analysis will publish the first preliminary estimate of the fourth-quarter Gross Domestic Product at 13:30 GMT. Analysts forecast the US economy to have expanded at a 3% annualized rate, slowing down from the 4.4% growth posted in the previous quarter.

Iran tensions and AI fears at the forefront ahead of key US data

Thursday’s scorecard shows major US Stock benchmarks closed modestly in the red amid mounting US-Iran tensions and AI disruption worries. The S&P 500 shed 19 points (0.3%) to 6,861, the Nasdaq 100 lost 101 points (0.4%) to 24,797, and the Dow Jones Industrial Average dropped 267 points (0.5%) to 49,395.

Official Trump price approaches breakout with mixed signals from traders

Official Trump (TRUMP) is trading at $3.50 at the time of writing, approaching its upper consolidation range. A breakout from this range could open the door for an upside move. On-chain data shows market indecision, with balanced flows between bulls and bears, signaling a lack of clear directional bias.