23 May 2024, EUR/USD
Event to watch out for today:
11:00 GMT+3. EUR - Composite PMI
15:30 GMT+3. USD - Unemployment Claims
16:45 GMT+3. USD - Composite PMI
EURUSD:
The Euro-dollar pair is trying to halt its three-day losing streak, hovering around the 1.0820 mark during the Asian session on Thursday. The strengthening of the Euro against the US Dollar (USD) can be attributed to the latter's corrective movement. Investors are likely to await the Purchasing Managers' Index (PMI) data from the eurozone and Germany before turning their attention to the US PMI, which will be released later in the North American session on Thursday.
The eurozone manufacturing PMI is forecast to rise to 46.2 from 45.7 in May, while the services PMI is expected to show a slight increase to 53.5 from 53.3. Meanwhile, in the US, the manufacturing and services PMIs are expected to remain unchanged at 50.0 and 51.3 respectively.
The Euro could face challenges as the European Central Bank (ECB) is expected to consider lowering borrowing costs at its June meeting. This expectation is due to the current inflation rate in the Eurozone, which stands at 2.4%, very close to the ECB's target of 2.0%. President Christine Lagarde recently stated that such action in June is highly likely if data continues to support confidence that inflation will eventually align with the ECB's target over the medium term.
The US Dollar (USD) strengthened on Wednesday as the minutes of the latest Federal Open Market Committee (FOMC) meeting indicated hawkish sentiment towards Federal Reserve (Fed) policy. Fed policymakers expressed concern over the lack of progress on inflation, which has been more persistent than expected in early 2024. As a result, the Fed is hesitant to start cutting interest rates.
Trading recommendation: Trade mainly with Sell orders from the current price level.
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