EUR/USD Approaches 1.09 Amid Inflation Data

By Daniel M.

May 28, 2024   •   Fact checked by Dumb Little Man

The EUR/USD pair is witnessing a short-term uptrend within a broader downtrend. This upward movement is partly due to the weakening US dollar, driven by expectations of a Federal Reserve (Fed) policy shift based on softer economic data. However, no official confirmation of this shift has been provided by Fed officials.

On the other side, the European Central Bank (ECB) is likely to reduce interest rates by 25 basis points at its next meeting. This anticipated move is already factored into the market, but it remains unclear whether the ECB will commit to a full policy shift or adopt a cautious stance.

Upcoming Economic Data

The latter part of this week will see a flurry of significant economic data from both the US and EU, likely increasing EUR/USD volatility. Key indicators to watch include the US GDP and the Personal Consumption Expenditures (PCE) Price Index.

The upcoming US GDP and inflation data are critical. Any unexpected negative GDP data might accelerate the Fed’s policy shift to prevent a severe recession. Inflation remains a pivotal measure that cannot be overlooked.

In the Eurozone, inflation data expected on Friday will be crucial in influencing the ECB’s upcoming decisions, depending on whether it aligns with market expectations.

Technical Analysis


Currently, the EUR/USD chart shows an ongoing rise, targeting the resistance zone just above 1.09. For potential trend reversals, the support level at 1.08 is key. A break below this level might lead to further drops, with an immediate target at 1.0740.

Daniel M.

Daniel Moore is a seasoned trading analyst with over 20 years of experience navigating the ever-evolving financial landscape. Renowned for his unconventional yet effective approach, Daniel utilizes a blend of technical and fundamental analysis to identify hidden gems and craft winning trade strategies. He is a master at demystifying complex market data and translating it into actionable insights for traders of all experience levels.

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