EUR/USD will slip below 1.1700 according to Core PCE TOPS estimates, data in the euro area

EUR/USD moves back to 1.1695 after reaching an annual peak above 1.1750.
PCE inflation in the USA increases beyond expectations; Consumer moods are improved, the weight of the euro.
The EBC node sees one more cut in 2025; French inflation cools, HICP Spain exceeds 2%.

EUR/USD withdraws from annual maxims above 1.1750, falling below 1.1700, despite the fact that market participants will be convinced that the Federal Reserve (FED) will reduce the rates at the September meeting. Mixed inflation report in the United States (USA) and optimism among American consumers exerted pressure on steam. At the moment, the couple trade at 1.1695, virtually unchanged.

Economic data occupy a central place on Friday, after de -leaning the conflict in the Middle East and news that China and the USA have concluded a commercial agreement. The American Bureau of Economic Analysis announced that the main expenses for personal consumption (PCE) were in line with the estimates and numbers from April. At the same time, the basic PCE, whose federal reserve is looking for as the preferred inflation indicator, has increased above expectations, which indicates that prices are modestly climbed.

In the European class of classes (ECB), the classes commented that at the end of 2025 at least one reduction of interest rates was expected by 25 base points. ECB vice president Luis de Guindos said inflation would reach 2%.

Doctor of the euro area revealed that inflation in France has dropped, while the harmonized consumer price indicator (HICP) in Spain exceeded the ECB’s goal.

Daily Digest Market Movers: Increased expectations for FED cutting in July enhance EUR/USD

Zloty recovery narrow the progress of EUR/USD in the direction of 1.1800. The American dollar index (DXY), which tracks Buck value in relation to the rivals’ basket, rises by 0.03% to 97.37 after reaching the lowest level of three and a half years 96.99.
PCE states disclosed by BEA increased by 2.3% y, unchanged compared to April and as expected by the median. The basic PCE, which excludes unstable items, such as food and energy, has expanded by 2.7% y / y, above estimates and 2.6% from the previous month.
According to the University of Michigan (UOM), consumer moods improved in June. The indicator has improved from 60.5 to 60.7 and the inflation expectations are lower. For 1 year, American households see that prices reach 5%, compared to 5.1%. For 5 years, it is expected that inflation will drop from 4.1% to 4%.
Neel Kashkari, the president of Minneapolis Fed, said that although the potential enhance in inflation may occur on the horizon, current data suggest further progress in the direction of 2% of the basic target inflation of the FED. He added that it takes more time to assess whether the effects of the trade war are only delayed or less harsh than initially expected.
Wall Street Journal has reported that the EU is supposed to be considering lowering the US imports for the effort of Curry Favor with President Trump. What’s more, the American trade secretary, Howard Lutnick, said that the EU has a snail-paced start, but now he is doing well, adding that there is an optimism of the agreement with Europe.
The President of the European Commission, Ursula von der Leyen, said that the EU is prepared for both the contract and the result, stating that all options remain on the table.
Cash markets suggest that traders value at 59 base points at the end of the year, in accordance with the main data of market terminals.

Technical prospects for euro: EUR/USD for testing 1.1800 in the near future

Strend up remains intact after printing the next series of higher levels and higher low, which indicates that the buyers remain under control. Although the relative force indicator (RSI) has reached overcrowded conditions, opening the door to withdrawal, EUR/USD will probably experience the inheritance, giving the possibility of buying a exchange rate in the direction of 1,1800. The violation of the latter will reveal 1,1900 and 1.2000.

And vice versa, if the EUR/USD drops below 1.1700, the first support would be June 26 the lowest lowest level 1.1653. After cleaning, the next support will be 1.1600, before the 50-day SMA at 1,1515.

FAQ euro

The euro is the currency of 19 European Union countries, which belong to the euro area. This is the second most frequently commercial currency in the world behind the American dollar. In 2022, it accounted for 31% of all currency transactions, with an average daily turnover of over USD 2.2 trillion per day. EUR/USD is the most rotating currency pair in the world, which is about a 30%discount on all transactions, followed by EUR/JPy (4%), EUR/GBP (3%) and EUR/AUD (2%).

The European Central Bank (EBC) in Frankfurt, Germany is a bank reserve bank. EBC sets interest rates and manages monetary policy. The main mandate of the ECB is to maintain price stability, which means either controlling inflation or stimulating growth. Its main tool is to enhance or reduce interest rates. Relatively high interest rates – or waiting for higher feet – will usually bring the benefits of the euro and vice versa. The ECB Managing Council makes decisions regarding monetary policy at meetings taking place eight times a year. Decisions are made by the heads of national banks of the euro area and six eternal members, including the President of EBC, Christine Lagarde.

Data on inflation in the euro area, measured by a harmonized consumer price indicator (HICP), are an essential econometric for the euro. If inflation increases more than expected, especially if it is above the target 2% EBC, it obliges EBC to raise interest rates to restore it to control. Relatively high interest rates compared to its counterparts will usually benefit the euro, because it makes the region more attractive as a place for global investors to park their money.

The data release the health of the economy and can affect the euro. Indicators such as GDP, PMI production and services, surveys regarding employment and consumer moods can affect the direction of the common currency. A mighty economy is good for the euro. It not only attracts more foreign investment, but can encourage EBC to set interest rates, which will directly strengthen the euro. Otherwise, if economic data is faint, the euro will probably fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are particularly significant because they constitute 75% of the euro area economy.

Another significant issue of data for the euro is the commercial balance. This indicator measures the difference between what the country earns on exports and what spends on imports in a given period. If the country generates a highly sought after export, its currency will gain value only from additional demand created by foreign buyers trying to buy these goods. Therefore, a positive net trade balance strengthens currency and vice versa for a negative balance.