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The EUR/USD currency pair tilted further into the red on Friday, as it extended a downside move for the third straight day and plummeted to the 1.1050 mark to round out the trading week. EU inflation figures released early Friday failed to impress anybody in particular, and US Personal Consumption Expenditure Price Index (PCE) data didn’t stray far from forecasts, keeping broad-market bets on rate cuts aimed squarely at the Federal Reserve’s (Fed) next rate call on Sept. 18.US PCE figures for July didn’t deliver any notable surprises to round out the trading week. Month-over-month US core PCE inflation held steady at 0.2%, as expected, but the year-over-year core PCE inflation figure held steady at 2.5% versus the anticipated move up to 2.6%. Rate markets seemed to be holding firmly to 30% odds of an initial double cut for 50 bps from the Federal Reserve on Sept. 18, while the remaining 70% leaned towards a single quarter-point cut. Overall, rate traders have recently been pricing in 100 bps in total cuts in 2024, according to CME’s FedWatch Tool.With PCE inflation data out of the way and not giving any warning signs, the way is paved to next week’s Nonfarm Payrolls (NFP) print, one of the last key pieces of economic data standing in the way of the Fed and rate-cut-hungry markets. Next week will also open on a quiet note, with US exchanges slated to remain shuttered for the Labor Day holiday. Some Purchasing Managers Index (PMI) releases are also scattered throughout the trading week.
EUR/USD Price Forecast
A third downside day tilted the currency pair firmly into a bearish pullback, and the EUR/USD duo’s price action was already halfway to the nearest technical level at the 50-day Exponential Moving Average (EMA) as it rose through the 1.0950 level. While the EUR/USD pair was still trading firmly in bull country north of the 200-day EMA at 1.0855, bids dropped the pair precipitously from yearly peaks reached earlier this week, and any bearish momentum in the coming days could develop some heat.
EUR/USD Daily Chart
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