EUR/USD edges higher above 1.0850 ahead of US ISM PMI data

FXStreet
Updated Jun 3, 2024 01:29
Mitrade
coverImg
Source: DepositPhotos

■  EUR/USD gains traction near 1.0850 in Monday’s early Asian session.

■  Markets believe the Fed needs more evidence to gain confidence that inflation is on course to its 2% target. 

■  The European Central Bank (ECB) is widely expected to cut the rate on Thursday. 


The EUR/USD pair extends the upside around 1.0850 on Monday during the early Asian session. The cooler US PCE inflation data and the better-than-expected Eurozone HICP inflation data provide some support for the major pair. The US ISM Manufacturing PMI for May will take center stage on Monday ahead of the European Central Bank interest rate decision on Wednesday.  

The Commerce Department's Bureau of Economic Analysis revealed on Friday that US inflation, as measured by the Personal Consumption Expenditures (PCE) Price Index, rose 0.3% on a monthly basis, as expected in April. On an annual basis, the PCE figure held steady at 2.7% YoY in April, matching March's increase and coming in line with the estimation.

The Core PCE Price Index, which excludes volatile food and energy prices, rose 2.8% on a yearly basis, in line with the market consensus. Core inflation was at its lowest level since March 2021. However, the recent data was not sufficient to trigger the Fed rate cut expectation, as investors believe the Fed needs more evidence to gain confidence that inflation is on course to reach its 2% target. 


The hotter-than-expected inflation in the Eurozone might not stop the ECB from cutting interest rates this week, but it may signal a halt in July and slower rate reductions in the coming months. Financial markets have priced in nearly 25 basis point (bps) ECB rate cuts in June and 57 bps cuts in 2024, according to Reuters. Traders will closely monitor Lagarde's press conference for fresh signals on the pace of rate cuts after June. Any dovish message from the ECB is likely to weigh on the Euro (EUR) and create a headwind for the EUR/USD pair. 


EUR/USD


Overview
Today last price 1.0854
Today Daily Change 0.0006
Today Daily Change % 0.06
Today daily open 1.0848
 
Trends
Daily SMA20 1.0822
Daily SMA50 1.0773
Daily SMA100 1.0808
Daily SMA200 1.0788
 
Levels
Previous Daily High 1.0882
Previous Daily Low 1.0811
Previous Weekly High 1.0889
Previous Weekly Low 1.0788
Previous Monthly High 1.0895
Previous Monthly Low 1.065
Daily Fibonacci 38.2% 1.0855
Daily Fibonacci 61.8% 1.0838
Daily Pivot Point S1 1.0812
Daily Pivot Point S2 1.0776
Daily Pivot Point S3 1.0741
Daily Pivot Point R1 1.0883
Daily Pivot Point R2 1.0918
Daily Pivot Point R3 1.0954

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

Do you find this article useful?
Related Articles
placeholder
Japan's National CPI rises 2.8% YoY, but Core CPI rises less than expectedJapan's National Consumer Price Index (CPI) rose on an annualized basis, with headline CPI inflation climbing 2.8% YoY versus the previous print of 2.5%.
Author  FXStreet
Japan's National Consumer Price Index (CPI) rose on an annualized basis, with headline CPI inflation climbing 2.8% YoY versus the previous print of 2.5%.
placeholder
USD/JPY Price Analysis: Steadies as Asian session begins, above 158.00The USD/JPY remains flat as Thursday’s Asian session begins, yet it printed minuscule gains of 0.15% on Wednesday.
Author  FXStreet
The USD/JPY remains flat as Thursday’s Asian session begins, yet it printed minuscule gains of 0.15% on Wednesday.
placeholder
EUR/USD escapes Wednesday’s holiday volatility trap, set for wait to meaningful dataEUR/USD cycled on Wednesday with US markets out for a midweek holiday, and the Fiber heads into the back half of the trading week with mid-tier data on the offering, leaving investors to look ahead to Friday’s Purchasing Managers Index (PMI) activity figures for meaningful data releases to drive sentiment in either direction.
Author  FXStreet
EUR/USD cycled on Wednesday with US markets out for a midweek holiday, and the Fiber heads into the back half of the trading week with mid-tier data on the offering, leaving investors to look ahead to Friday’s Purchasing Managers Index (PMI) activity figures for meaningful data releases to drive sentiment in either direction.
placeholder
AUD/USD holds positive ground above 0.6650 as weaker US Retail Sales data boosts Fed rate cuts chanceThe pair edges higher after the weaker-than-expected US Retail Sales data and hawkish hold from the Reserve Bank of Australia (RBA) at its June meeting on Tuesday.
Author  FXStreet
The pair edges higher after the weaker-than-expected US Retail Sales data and hawkish hold from the Reserve Bank of Australia (RBA) at its June meeting on Tuesday.
placeholder
USD/JPY flat lines below 158.00, bulls turn cautious amid subdued USD price actionThe USD/JPY pair is seen oscillating in a narrow band during the Asian session on Wednesday and currently trading just below the 158.00 round-figure mark.
Author  FXStreet
The USD/JPY pair is seen oscillating in a narrow band during the Asian session on Wednesday and currently trading just below the 158.00 round-figure mark.