- EUR/USD eases lower as risk-off flows bolster the Greenback.
- A spike in US Services PMIs reignite fears of sticky inflation.
- Fed rate cut hopes hinging in easing services inflation stumble.
EUR/USD headed lower on Thursday, driven closer to the 1.0800 handle after an unexpected upswing in US Services Purchasing Managers Index (PMI) figures sparked renewed fears of fewer Federal Reserve (Fed) rate cuts. This sent investors into the safe-haven US Dollar and deflated the Euro despite better-than-expected HCOB PMI figures earlier in the day.
European and US PMI figures on Thursday both beat market expectations, with figures broadly printing above expectations and improving on previous figures, but a higher-than-forecast upswing in US Services PMIs from 51.3 to 54.8 pummeled broad-market expectations for a Fed rate cut in September.
Forex Today: Data continues to rule the sentiment
According to the CME’s FedWatch Tool, rate traders are pricing in barely even odds of at least a quarter-point cut at the September Federal Open Market Committee (FOMC) meeting. Significantly lower than the 70% odds that were priced in at the beginning of the trading week, investors are grappling with the possibility of no Fed cuts in 2024.
Traders’ broad hopes for Fed rate trims have been slowly ground to a paste through 2024. In December, markets were broadly pricing in at least six rate cuts from the Fed through the end of the year. Fast forward to late May, and investors are scrambling to hold onto hopes of a single cut, potentially as late as December.
Friday brings a Gross Domestic Product (GDP) update for Germany, which is expected to hold steady at 0.2% for the first quarter. US Durable Goods Orders in April are slated to print during Friday’s US market session, and are forecast to backslide -0.8% MoM compared to the previous month’s 2.6%.
Euro PRICE This week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.51% | 0.05% | 0.88% | 0.83% | 1.34% | 0.56% | 0.58% | |
| EUR | -0.51% | -0.50% | 0.41% | 0.32% | 0.86% | 0.08% | 0.07% | |
| GBP | -0.05% | 0.50% | 0.76% | 0.82% | 1.34% | 0.56% | 0.55% | |
| JPY | -0.88% | -0.41% | -0.76% | -0.06% | 0.47% | -0.27% | -0.29% | |
| CAD | -0.83% | -0.32% | -0.82% | 0.06% | 0.47% | -0.24% | -0.25% | |
| AUD | -1.34% | -0.86% | -1.34% | -0.47% | -0.47% | -0.79% | -0.78% | |
| NZD | -0.56% | -0.08% | -0.56% | 0.27% | 0.24% | 0.79% | -0.01% | |
| CHF | -0.58% | -0.07% | -0.55% | 0.29% | 0.25% | 0.78% | 0.01% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
EUR/USD technical outlook
EUR/USD is waffling into reach of the 1.0800 handle, trading on the south side of the 200-hour Exponential Moving Average (EMA) at 1.0833. The Euro took an early run at a high bid on Thursday of 1.0860, but short pressure quickly dragged the Fiber down into fresh lows for the trading week.
On daily candlesticks, EUR/USD is getting dragged back into consolidation at the 200-day EMA at 1.0801, and the pair has declined for all but one of the last five trading days.
EUR/USD hourly chart
EUR/USD daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD Price Analysis: Sideways trend continues unfolding
AUD/USD is in a down-leg within a narrow trading range. The pair is probably in a sideways trend with the odds favoring an extension of that trend. A decisive break above or below the top or bottom of the range would generate follow-through targets.
EUR/USD: Central banks’ decisions will keep taking their toll
The EUR/USD pair slid below the 1.0700 mark for the first time in over a month on Friday, as the US Dollar surged on the back of risk aversion. The dismal mood prevailed throughout the week, with a short-lived exception on Wednesday when softer-than-anticipated United States inflation brought a breath of fresh air.
Gold gains ground as traders dial up Fed rate cut bets for September
Gold registered limited gains this week, supported by safe-haven flows and soft inflation data from the US. In the absence of high-impact macroeconomic data releases ahead, investors will pay close attention to technical developments in XAU/USD and comments from Federal Reserve officials.
Bitcoin active addresses hit lowest level in five years, BTC ranges below $67,000
Bitcoin, the largest asset by market capitalization, has noted a decline in its active address count per data from Glassnode. A decline in active addresses is typical at a time during a surge in Bitcoin transaction fees.
Week ahead: RBA, SNB and BoE next to decide, CPI and PMI data also on tap
It will be another central-bank-heavy week with the RBA, SNB and BoE. Retail sales will be the highlight in the United States. Plenty of other data also on the way, including flash PMIs and UK CPI.