EUR/USD breaks above 1.0880 after US Core PCE as USD slides

The US Core PCE annual rate slowed from 4.7% to 4.6% in May.
The US dollar weakened modestly after the report.
The EUR/USD turned positive for the day after rebounding from two-week lows.

Matías Salord FXStreet

The EUR/USD rebounded further after US consumer inflation data and climbed above 1.0880, hitting fresh daily highs, boosted by a weaker US dollar. The greenback pulled back after the report, and commodities and US equities futures rose.

The US Bureau of Economic Analysis reported on Friday that inflation, as measured by the change in Personal Consumption Expenditures (PCE) Price Index, fell to 3.8% YoY in May from 4.3% in April, below the market consensus of 4.6%. The Fed's preferred measure, the Core PCE, also fell from 4.7% to 4.6%.

As a result of the report, the US Dollar weakened. The DXY retreated from weekly highs above 103.50 towards 103.00, and US Treasury yields dropped back to neutral territory for the day. The US 10-year yield fell from three-month highs at 3.89% to 3.84%.

Later on Friday, the University of Michigan releases the final estimate for consumer sentiment, and also the Chicago PMI is due.

EUR/USD holding above the 20-day SMA

The EUR/USD bottomed on Friday at 1.0835, the lowest level since June 15. It started to rebound and after US data accelerated towards 1.0900, boosted by a weak US dollar and risk appetite. The combination is favorable for the upside.

The rebound in EUR/USD took place from near the 20-day Simple Moving Average (SMA) line at 1.0855. A daily close below that level could point to weakness ahead for the Euro from a technical perspective. On the upside, the next areas to watch are 1.0900 and then the 20-period SMA in the 4-hour chart, which is waiting at 1.0910. A recovery above that level would strengthen the short-term outlook for the Euro.

Technical levels

EUR/USD

Overview
Today last price	1.0872
Today Daily Change	0.0004
Today Daily Change %	0.04
Today daily open	1.0868

Trends
Daily SMA20	1.0847
Daily SMA50	1.0873
Daily SMA100	1.0817
Daily SMA200	1.0585

Levels
Previous Daily High	1.0941
Previous Daily Low	1.086
Previous Weekly High	1.1012
Previous Weekly Low	1.0844
Previous Monthly High	1.1092
Previous Monthly Low	1.0635
Daily Fibonacci 38.2%	1.0891
Daily Fibonacci 61.8%	1.091
Daily Pivot Point S1	1.0839
Daily Pivot Point S2	1.0809
Daily Pivot Point S3	1.0758
Daily Pivot Point R1	1.092
Daily Pivot Point R2	1.0971
Daily Pivot Point R3	1.1001

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

AUD/USD rises to 0.6950 as USD slips on Fed's Warsh

AUD/USD regains traction and extends the bounce toward 0.6950 in the Asian session on Friday. Fed Chair Warsh's comments reinforce the selling pressure on the US Dollar, allowing the pair to stretch higher. Warsh said that he remains committed to delivering price stability without giving away anything on future interest rate path.

USD/JPY falls in symc with USD, gives up 158.00 after Warsh's speech

USD/JPY has come under fresh selling pressure and gives up 158.00 in the Asian session on Friday amid the emergence of fresh US Dollar selling. Fed Chair Warsh's non-committal commentary on the future tightening path, weighs on the US Dollar and the pair.

Gold looks vacillating above $4,150

Gold alternates gains with losses below the key $4,200 mark per troy ounce on Friday. The yellow metal’s irresolute price action comes in response to a modest pullback in the US Dollar and a tepid recovery in US Treasury yields across the board.

Bitcoin steadies at $82,000: The five forces crushing the Uptober rally

Crypto markets have remained under pressure so far in October, with Bitcoin (BTC) sliding below $80,000 earlier this week before recovering to around $82,000 on Friday, as macroeconomic headwinds and cooling demand weigh on the market.

The Fed just got a second hot inflation number. Here's what the diesel signal is really saying

The Federal Reserve (Fed) faces a renewed inflation challenge after two consecutive reports showed price pressure intensifying across the US economy. September's Consumer Price Index (CPI) confirmed accelerating consumer inflation, while the Producer Price Index (PPI) revealed an even sharper rise in business costs. Behind both reports lies a common factor: energy prices.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.