The EUR/USD pair was under selling pressure for the second consecutive day on Wednesday. However, prices held above the 1.0800 mark during the Asian session. It appears that they may continue to decline due to follow-through buying of the US Dollar (USD).
The shared currency is being influenced by increasing bets on a June rate cut by the European Central Bank (ECB). ECB policymaker Madis Muller stated on Tuesday that the central bank may soon begin cutting rates. Additionally, ECB spokesman Yannis Stoumaras confirmed that there is consensus for a rate cut in June. These developments are contributing to the tone of the EUR/USD pair and supporting the prospects for the continuation of the more than two-week downtrend.
Attention will remain focused on the US Personal Consumption and Expenditure (PCE) price index on Friday. This important data will provide additional clues as to the Fed’s policy path, which should, in turn, influence the near-term dynamics of the dollar price and help determine the next stage of directional movement of the EUR/USD pair.
Trading recommendation: Trade in the channel 1.0800-1.0870 on a bounce from the levels.
Origin: FreshForex
