EUR/USD broke a three-day losing streak in the early European session on Friday. The major pair is recovering despite renewed demand for the US Dollar (USD). At the time of publication, the EUR/USD pair is trading at 1.0811, gaining 0.03% on the day.
Eurozone inflation fell further last month, sparking speculation that the European Central Bank (ECB) will start cutting interest rates from record highs later this year. Next week, the ECB will announce its interest rate decision on March 7, and the rate is expected to remain unchanged. The ECB is expected to lower its inflation and growth forecasts at its March meeting, while emphasizing the need for more data to ensure that wage growth does not cause price pressures before cutting lending rates.
The US Personal Consumption Expenditures (PCE) price index for January matched expectations, with core PCE at 2.4% y/y and core PCE at 2.8% y/y. The report confirms that the rate of inflation in the US continues to slow. However, Federal Reserve (Fed) officials are likely to wait for new inflation data, and they have no reason to rush to cut rates.
Trading recommendation: We trade in the channel 1.0800-1.0860, priority to buy
Origin: FreshForex
