EUR/USD flat-lines around 1.0990, markets turn cautious ahead of US PPI data

EUR/USD remains sideways around 1.0985, gaining 0.05% as markets turn cautious ahead of US PPI data.
ECB Economic Bulletin revealed that the Eurozone’s inflation is still expected to be too high for too long.
The US Core CPI fell to 4.7% from 4.8%, Initial Jobless claims totaled 248,000.
Traders will closely watch July’s US Producer Price Index (PPI), UoM Consumer Confidence Survey.

Lallalit Srijandorn FXStreet

The EUR/USD pair holds ground above the 1.0980 mark heading into the early European session on Friday. The major pair trades in positive territory for the third consecutive day after retreating from a weekly high of 1.1065 following US inflation data. Market participants prefer to wait on the sidelines ahead of the US Producer Price Index (PPI), due later in the American session.

The European Central Bank's (ECB) monthly Economic Bulletin revealed on Thursday that the Eurozone’s inflation is still predicted to be too high for too long, and the prospects for economic growth and inflation are still uncertain. According to the Reuters poll, the target inflation rate of 2.0% will not be reached until at least 2025, and more than 90% of economists surveyed anticipate no rate cuts before the second quarter of 2024.

On the US Dollar docket, the US Consumer Price Index (CPI) rose to 3.2% YoY from 3% in June. The figure was below the market consensus of 3.3%. While the Core CPI figure, which excludes volatile food and energy prices, fell to 4.7% from 4.8%. Additionally, the US Initial Jobless Claims increased to 248,000, above the expectation of 230,000. In response to the data, the US Dollar reversed its course and dragged the Euro lower on Thursday.

Apart from this, the Fed San Francisco President, Mary C. Daly, stated on Thursday that there is a lot more information to evaluate and that it is premature to project whether additional rate increases or a prolonged period of holding rates are required. This, in turn, caps the upside for the Euro and acts as a headwind for the EUR/USD pair.

Looking ahead, all eyes are on the highly anticipated US inflation data. The US Producer Price Index (PPI) will be released later in the day. The figure is expected to rise from 0.1% to 0.7% YoY. Also, the University of Michigan (UoM) Consumer Confidence Survey will be due on Friday. Traders anticipate that the data might convince the Federal Reserve (Fed) that it is now under control and no further interest rate increases are necessary. The data will be critical for determining a clear movement for the EUR/USD pair.

EUR/USD

Overview
Today last price	1.0988
Today Daily Change	0.0007
Today Daily Change %	0.06
Today daily open	1.0981

Trends
Daily SMA20	1.1057
Daily SMA50	1.0957
Daily SMA100	1.0928
Daily SMA200	1.0768

Levels
Previous Daily High	1.1065
Previous Daily Low	1.0967
Previous Weekly High	1.1046
Previous Weekly Low	1.0912
Previous Monthly High	1.1276
Previous Monthly Low	1.0834
Daily Fibonacci 38.2%	1.1028
Daily Fibonacci 61.8%	1.1005
Daily Pivot Point S1	1.0944
Daily Pivot Point S2	1.0907
Daily Pivot Point S3	1.0846
Daily Pivot Point R1	1.1042
Daily Pivot Point R2	1.1102
Daily Pivot Point R3	1.114

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

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