EURUSD:
EUR/USD holds near 1.16 as markets adopt a wait-and-see stance ahead of the U.S. inflation release. The focus is on the impact of tariffs and supply-chain shifts on price dynamics and consumer demand. Expectations for an upcoming Federal Reserve rate cut are largely priced in, yet the publication itself can briefly support the dollar through higher Treasury yields and a firmer bid for safe assets.
In Europe the data flow remains uneven: some confidence indicators are improving, but overall growth stays subdued. Against this backdrop the ECB remains cautious in assessing further policy easing, while investors watch how the bank balances economic risks with its inflation objective. With limited prospects for a near-term acceleration in European growth, appetite for the euro is restrained.
Geopolitics and commodity prices add background noise. Rising uncertainty around external trade relations and sanctions raises energy-market volatility. For the euro area this worsens the terms of trade through more expensive energy imports, limiting the euro’s upside against the dollar in the near term.
Trading recommendation: SELL 1.1605, SL 1.1645, TP 1.1550
Origin: FreshForex
