11 July 2024, EUR/USD
Events to watch out for today:
15:30 GMT+3. USD - Consumer Price Index
18:30 GMT+3. USD - FOMC member Rafael Bostic will deliver a speech
20:00 GMT+3. USD - FOMC Member Alberto Musalem to deliver a speech
EURUSD:
EUR/USD found itself in a bullish zone on Wednesday, pushed by dollar selling in the broad market. Market sentiment rebounded strongly and leaned towards expectations of renewed rate cuts after Federal Reserve (Fed) Chairman Jerome Powell delivered his own version of a dovish stance while giving two days of testimony to US Congressional committees. EU data remains sparse, with the exception of Germany's final harmonized consumer price index (HICP) reading on Thursday, and markets will turn their attention to a double dose of key US inflation data due out today and Friday.
During the European session on Thursday, the final German HICP inflation data will be released but is expected to be little changed with the annualized rate for June remaining at 2.5%.
Markets expecting a rate cut saw Fed Chairman Powell's speech to Congressional committees as dovish this week. Powell cautiously acknowledged recent progress on inflation, which sparked a rebound in risk appetite as investors once again hope for a rate cut in September. On Thursday, investors will be watching for lower-than-expected CPI inflation in the US. The average market forecast is for annual core CPI inflation to remain at 3.4% in June.
Further US inflation data is scheduled to be released on Friday, including the core producer price index (PPI) for wholesale trade. The index is expected to rise to 2.5% y/y from the previous reading of 2.3%, which could weigh on expectations of a broad market rate cut.
Trading recommendation: Trade predominantly with buy orders at the price level of 1.0865. We consider sell orders at the price level of 1.0800.
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