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The EUR/USD pair increased to 1.0755, a four-day high. Prior to the ECB decision on Thursday, expectations for the tightening ECB remain stable. The US CPI data for August are expected on Wednesday.
The EUR/USD rose towards the 1.0755 region at the beginning of the week, with gains of more than 0.50%, before settling close to 1.0745. On the one hand, investors are preparing for Wednesday’s release of the Consumer Price Index (CPI) numbers for August while the USD is retreating and trading at a loss against the majority of its competitors. Investors in the Euro anticipate the European Central Bank’s (ECB) decisions on Thursday, where markets discount the slim chances of an increase.
The US labour market is expected to experience both accelerating job growth and reducing pay inflation, according to recent data. In contrast, economic activity has exhibited strength in the services sector but weakness in the industrial sector. Despite the fact that investors have already called for a halt in next week’s Fed meeting, they will need the inflation data from August in order to continue modelling their expectations.
Hot inflation readings may enhance wagers in favour of hawkish outcomes for the November and December meetings. The headline CPI is predicted to have grown by 0.2% MoM while the Core measure by 0.5%.
In contrast, the Euro is currently trading at a discount to the majority of its competitors ahead of the ECB announcements on Thursday.
The majority of the 55 analysts surveyed, according to Bloomberg, are anticipating a halt, with 25 anticipating a 25 basis point increase. In the meeting in October, there is a 60% possibility of a 25-bps hike, and there is a 70% chance of a similar increase in December. In order to gather information about the upcoming steps, investors will closely monitor Christine Lagarde’s tone on Thursday and the bank’s statement.
Based on the daily chart, EUR/USD maintains a neutral to bearish technical outlook, indicating that the bears are in charge despite the bulls gaining strength.
