EURUSD:
EUR/USD is holding near 1.1660 amid a cautious USD tone ahead of upcoming Fed remarks and rising expectations of policy easing in the US by early autumn. Markets continue to price a non-trivial chance of a Fed rate cut as soon as September, which caps the dollar’s upside despite occasional safe-haven bids. A neutral risk backdrop and the divergence in rate expectations favor the euro, keeping the pair above last week’s local lows.
On the US side, inflation and activity data remain the key drivers: a mixed CPI alongside a hotter-than-expected PPI last week stirred volatility but did not alter the base case of slowing momentum and an approaching Fed pivot. Softer real-yield premia and increasingly dovish messaging from some FOMC members are eroding the dollar’s appeal over the next few weeks.
In the euro area, despite passing the inflation peak and the ECB’s more dovish posture after its June cut, the macro mix looks balanced: softer pockets in the PMIs are offset by hints of external-demand stabilization and sticky services inflation. In this setup, short-term euro support stems more from US rate repricing than from accelerating eurozone growth. Taken together, this keeps a moderately bullish bias for EURUSD as long as the US data flow does not deliver hawkish surprises.
Trading recommendation: BUY 1.1655, SL 1.1625, TP 1.1715
Origin: FreshForex
