EUR/USD Surge Amid Rising Fed Rate Cut Expectation

Fundamental Analysis

* Dovish Delight: The Euro has maintained its upward trend against the US Dollar for the third consecutive day. This movement is fueled by speculation that the US Federal Reserve may cut interest rates in 2024, weakening the US Dollar and supporting the EUR/USD pair. On Friday, the US Bureau of Economic Analysis reported that US inflation had fallen to its lowest annual rate in over three years. The US Personal Consumption Expenditures (PCE) Price Index increased by 2.6% year-over-year in May, down from 2.7% in April, meeting market expectations. Likewise, Core PCE inflation rose by 2.6% year-over-year in May, down from 2.8% in April, also aligning with estimates. The anticipated decline in underlying inflation data is expected to boost market speculation that the Federal Reserve will reduce interest rates starting from the September meeting. According to the CME FedWatch tool, two rate cuts are projected for this year.

Technical Analysis

* Technical Breakout: EURUSD was traded higher following prior breakout above 1.07450. MACD which illustrate bullish momentum signal with recent bullish market structure breakout suggest the pair to further extend its gains.

* Resistance and Support: If the bullish momentum persists, there’s a strong likelihood that the price will potentially head towards 1.08050. Conversely, a potential correction is also to be expected and the price could head towards 1.06750 after it breaks back below the level 1.07450.

Understand how technical analysis can help you in this trading opportunity.

Potential Risks

Moving ahead, the market will closely watch the key data release from the U.S for this week, such as ADP Non Farm Employment, Nonfarm Payrolls and Unemployment Rate to gauge further sentiment and potential direction from the Fed.

Know how to manage trading risks with risk management strategies.

Monitoring

Stay updated on US data, US election, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

Grab the trading opportunity and dive into the action risk-free with a free demo account. It is the perfect way to hone your skills and explore the exciting world of trading!

Open Your Free Demo Account And Start Trading Risk-Free

Join Now

Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.