- Powell noted significant progress on inflation in the US.
- There was an unexpected jump in US job openings in May.
- Eurozone inflation fell last month, but underlying price pressures remained high.
The EUR/USD price analysis paints a bullish picture as the dollar remains fragile after Powell’s slightly dovish remarks. Meanwhile, the euro was strong, as data revealed that underlying inflation in the Eurozone remained high.
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The dollar eased on Tuesday after Powell’s speech, in which he assumed a moderately dovish tone. Powell noted significant progress on inflation, which could allow the Fed to cut rates later this year. Consequently, investors raised the likelihood of a September rate cut from 63% to 69%.
Meanwhile, US employment data revealed an unexpected jump in job openings in May, indicating tight labor market conditions. Vacancies rose to 8.140 million compared to forecasts of 7.910 million. This report should have propelled the dollar higher. However, the market focus was on Powell’s speech.
Elsewhere, Eurozone inflation fell last month, but underlying price pressures remained high. The headline CPI figure dropped to 2.5% after a 2.6% increase in May. Meanwhile, core inflation held at 2.9% compared to estimates of 2.8%, as service prices kept rising.
Therefore, ECB President Christine Lagarde said there was no hurry to lower borrowing costs. Policymakers need time to watch where inflation will head. Other data from the Eurozone showed that the unemployment rate held at a low of 6.4% in May. The ECB might delay cuts due to labor market strength. As a result, chances of a cut in July have fallen while those in September have risen.
EUR/USD key events today
- US ADP non-farm employment change
- US unemployment claims
- US ISM services PMI
- FOMC meeting minutes
EUR/USD technical price analysis: Bulls make second attempt at 1.0750 barrier
On the technical side, the EUR/USD price is making another attempt to breach the 1.0750 resistance level. The first attempt failed when the price fell back below the level. However, it respected the 30-SMA as support, a sign that bulls are in control. At the same time, the RSI has stayed above 50, supporting bullish momentum.
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Therefore, there is a high chance the price will break above 1.0750. If this happens, bulls will target the next resistance at 1.0850. On the other hand, if the attempt fails, the price will likely retest the 1.0675 support, staying in consolidation.
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Saqib Iqbal
