- The EUR/USD exchange rate has recovered from last week’s decline, but remains at 1.0730.
- As USD flows declined, euro investors shrugged off the lack of data from Germany.
- Tuesday constrained to mid-level publications and a few speeches by the central planner.
The EUR/USD rate rose as part of a bland recovery after last Friday’s decline to 1.0670. The recent trading week begins with significantly higher risk appetite, causing the US dollar to fall and the euro to strengthen as investors head into a relatively silent Tuesday.
Daly Fed: Inflation is not the only risk, but recent inflation readings are more encouraging
Key economic data releases will be pushed back to later in the week, leaving investors to focus on policymakers’ announcements as they appear on the landscape until significant data releases begin in the second half of the trading week. U.S. gross domestic product (GDP) data is scheduled to be updated on Thursday, and Friday will end the trading week with German retail sales and the latest update to the U.S. personal consumption expenditures (PCE) price index.
Fed’s Goolsbee: Slowing inflation data would pave the way for easier policy
Tuesday’s economic calendar is particularly restrained due to the speech of the president of the German central bank, Joachim Nagel. Federal Reserve (Fed) officials are expected to make several speeches during Tuesday’s US market session, with central planners likely to lean towards a moderate Fedspeak, echoing Monday’s results.
German sentiment surveys broadly missed early Monday expectations, but European markets are flaunting weaker EU data to follow the broader market higher as risk appetite continues to support hopes for at least a quarter-point cut from Federal Open Market Committee (FOMC) September 18 call rate. According to CME’s FedWatch tool, interest rate traders are pricing in about a 70% chance of the Fed cutting rates by 25 basis points in September.
EUR/USD Technical Outlook
EUR/USD rose after recovering from last Friday’s decline to 1.0670, but the bullish momentum stalled after intraday bids stalled at the 200-hour exponential moving average (EMA) at 1.0737. EUR/USD continues to remain low on the daily candles, with price action trading on the bearish side of the 200-day EMA at 1.0815.
