- EUR/USD trimmed near-term gains on Monday, holding above 1.0800 but declining.
- French elections delivered a less-than-solid outcome, coalition minority set for deadlock.
- US Fed Chair Powell due to testify before US federal committees this week.
EUR/USD stumbled on Monday after a muddled election outcome in France leaves policy guidance unclear for the Euro bloc. A coalition minority government win in France kept a financially-disastrous far right party out of the leadership race after a strong upset in earlier European Parliamentary elections. Still, the win was anything but decisive as a hodge-podge of coalition parties with conflicting ideologies is set for policy deadlock in France in the coming months.
Forex Today: All eyes on Powell
Federal Reserve (Fed) Chairman Jerome Powell is set to make the first of two appearances this week as the Fed head delivers the semiannual Monetary Policy Report to the US Senate Banking Committee. This will be followed up by a second appearance on Wednesday to deliver the same report to the US Congressional House Committee on Financial Services.
Later this week, key US inflation data will be released. The US Consumer Price Index (CPI) inflation is due on Thursday, and the Producer Price Index (PPI) wholesale inflation is slated for Friday. Some traders who are hoping for a decrease in inflation to push the Fed into making rate cuts sooner rather than later may be disappointed. Forecasts suggest that both CPI and PPI inflation figures are expected to either remain steady or increase slightly.
Final German inflation figures will be published during the Thursday European market session. German Harmonized Index of Consumer Prices (HCOB) inflation is broadly expected to hold steady 2.5% YoY as inflation pressures continues to vex the Bundestag’s 2% inflation target.
Economic Indicator
Consumer Price Index ex Food & Energy (MoM)
Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as the Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The MoM print compares the prices of goods in the reference month to the previous month.The CPI Ex Food & Energy excludes the so-called more volatile food and energy components to give a more accurate measurement of price pressures. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.Next release: Thu Jul 11, 2024 12:30
Frequency: Monthly
Consensus: 0.2%
Previous: 0.2%
Source: US Bureau of Labor Statistics
The US Federal Reserve has a dual mandate of maintaining price stability and maximum employment. According to such mandate, inflation should be at around 2% YoY and has become the weakest pillar of the central bank’s directive ever since the world suffered a pandemic, which extends to these days. Price pressures keep rising amid supply-chain issues and bottlenecks, with the Consumer Price Index (CPI) hanging at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain an aggressive stance in the foreseeable future.
EUR/USD technical levels
Fiber is struggling after repeated near-term failures to breach above 1.0840, and bulls are running out of gas as the 200-hour Exponential Moving Average (EMA) rises into 1.0780, keeping a tight floor under intraday price action.
Daily candles continue to churn in the midrange of a rough descending channel through 2024, and EUR/USD is set to face a drooping technical ceiling as the upper bound eases to 1.0850.
EUR/USD hourly chart
EUR/USD daily chart
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
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 tumbles to a five-year low below 0.6000 amid US-China tariffs war
The AUD/USD pair tumbles to near 0.5985 for the first time since the COVID-19 pandemic during the early Asian session on Monday. The Australian Dollar weakens as China slapped a 34% tax on all US imports in retaliation for US President Donald Trump’s tariffs, raising fear of a trade war between the United States and China.

USD/JPY hangs near a multi-month low; holds above 145.00 amid mixed cues
USD/JPY kicks off the new week on a weaker note, though it manages to hold above the 145.00 mark. The global carnage, amid the mounting risk of a recession led by Trump's sweeping tariffs, underpins the safe-haven JPY and weighs on the currency pair amid a bearish USD.

Gold correction deepens after new record-high is set on Trump’s tariff announcement
Gold pushed higher with the initial reaction to tariff announcements from the United States on Wednesday and touched a record peak of $3,167 before staging a deep correction heading into the weekend. Investors will stay focused on tariff-related headlines and pay close attention to inflation data from the US.

Week ahead: US CPI and RBNZ decision on tap amidst tariff mayhem
US Dollar traders await US CPI data amid global trade turbulence. RBNZ to cut by 25bps, could maintain dovish stance. China’s CPI and PPI to reveal tariff impact on inflation. Strong UK GDP data could help the pound climb higher.

Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.

The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.