EUR expected to extend uptrend once 1.0900 cleared

The EUR/USD pair is trading slightly above 1.0900 in the European session on Friday, exactly at 1.0905 at the time of writing.

The US economic calendar will feature producer inflation data for June. Near-term technical outlook points to overbought conditions for the pair.

The EUR/USD pair gathered bullish momentum during the North American session on Thursday and reached its highest level since early June at 1.0900. After staging a downward correction, the pair holds comfortably above 1.0850 in the European session on Friday.


The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR.

Soft inflation data from the US caused the US Dollar (USD) to come under heavy selling pressure. The Consumer Price Index (CPI) declined by 0.1% on a monthly basis, while the core CPI rose only 0.1% in the same period. Both of these readings came in below market expectations and allowed investors to continue to price in a Federal Reserve (Fed) rate cut in September.

According to the CME FedWatch Tool, the probability of the Fed leaving the policy rate unchanged in September declined below 10% from above-20% before the CPI data releases.

In the second half of the day, the Producer Price Index (PPI) data for June will be featured in the US economic docket. On a monthly basis, the PPI is forecast to rise 0.1%. A negative reading could put additional weight on the USD’s shoulders and help EUR/USD push higher. On the other hand, a stronger-than-forecast increase could help the USD stay resilient against its rivals but market reaction could remain limited.

The Relative Strength Index (RSI) indicator on the 4-hour chart stays above 70, suggesting that EUR/USD remains technically overbought despite the pullback seen in the late American session on Thursday.