EUR/USD Soars to Monthly Highs as Fed Rate Cut Expectations Intensify
Fed Chair Jerome Powell's recent Congressional testimony hinted at easing labor market conditions and progress in combating inflation, fueling speculation of a policy pivot.
Market Focus Shifts to US Inflation Data
Investors are now eagerly awaiting the release of the US Consumer Price Index (CPI) data for June, which could offer further clues on the Fed's policy trajectory. A softer-than-expected CPI reading could solidify rate cut expectations, while hotter-than-expected data might force a reevaluation.
Euro Strengthened by Political Stability and ECB Outlook
The Euro (EUR) also benefited from easing concerns over a potential French financial crisis and diminishing expectations of aggressive rate cuts by the European Central Bank (ECB). The recent confirmation of slowing inflation in Germany further supports the EUR's strength.
Technical Analysis: Bullish Breakout and Upward Momentum
The EUR/USD pair recently broke out of a Bullish Flag formation on the 4-hour chart, signaling a continuation of the bullish trend. The 20-period Exponential Moving Average (EMA) at 1.0825 provides additional support, while the 14-day Relative Strength Index (RSI) has entered the bullish range, indicating strong upward momentum.
The next major target for EUR/USD is the psychological level of 1.0900. On the downside, the June 19th high at 1.0750 acts as a significant support zone.
Key Points:
- EUR/USD hits one-month high amid Fed rate cut speculation.
- US CPI data to be a key market driver.
- Political stability in France and ECB outlook support EUR.
- Technical analysis confirms bullish breakout and upward momentum.