EUR/USD Forecast. Euro rushes upwards!

news_22_feb_dollar_usdEURUSD:

The Euro-dollar pair is trading on a stronger note around 1.0710 in the early hours of Asian trading on Monday. The weakening of the US Dollar (USD) below 106.00 provides some support for the major pair. On Monday, the first reading of the German Consumer Price Index (CPI) for April is due to be released. On Wednesday, all eyes will be on the US Federal Reserve’s monetary policy meeting, where no rate change is expected.

Recent U.S. inflation data has led to lower expectations about when the Federal Reserve (Fed) will start cutting interest rates. According to CME’s FedWatch tool, the probability of a rate cut by the July meeting fell to 25% from 50% last week, while traders estimated a nearly 60% chance that the Fed will cut interest rates at the September meeting. This, in turn, could boost the US dollar and limit the EUR/USD pair’s near-term gains.

On Friday, the US Bureau of Economic Analysis reported that the Personal Consumption Expenditures (PCE) price index rose 2.7% y/y in March from the previous reading of 2.5%, above the forecast of 2.6%. The Core PCE, which the Fed prefers to use to measure inflation, remained at 2.8% y/y in March, above the expected 2.6%. On a monthly basis, both Core and Core PCE price indexes rose 0.3% in March.

Trading recommendation: Trade predominantly with Buy orders from the current price level.

EUR/USD rushes upwards!

Origin: FreshForex

 

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