Analysis of the Euro vs. US Dollar

• Fundamental Analysis of Key News and Economic Data for This Week
• What is the Current Overall Trend for This Pair?

The Euro vs. US Dollar pair has been under the spotlight this week due to important economic news and data from both the Eurozone and the United States.

In the US, markets were anticipating the release of inflation data, which was published on Wednesday, September 11. The annual Consumer Price Index (CPI) fell from 2.9% to 2.5%, aligning with market expectations. This decline was largely supported by recent decreases in oil prices. The monthly core CPI, however, showed a positive reading of 0.3%, higher than the expected 0.2%. Significant contributors to this increase included higher prices in transportation services and housing.

Additionally, on Thursday, September 12, the Producer Price Index (PPI) for the month was released, showing a positive reading of 0.2%, exceeding market expectations of 0.1%. The core PPI also rose to 0.3% on a monthly basis.

Following these mixed data points, which had both positive and negative implications for the US dollar, the Dollar Index remained stable between the resistance level of 101.855 and the support level of 100.400, awaiting the Federal Reserve meeting on September 17-18. Expectations indicate a potential interest rate cut of 25 basis points.

In the Eurozone, the European Central Bank (ECB) lowered deposit interest rates by 25 basis points. ECB President Christine Lagarde stated that future ECB decisions on interest rates will be based on inflation data and its dynamics. After the ECB meeting and President Lagarde’s speech, the euro rose by approximately 0.57%, marking the best daily performance of the week, according to the analyst.

Technical View on the Euro vs. US Dollar

Figure 1: EURUSD Chart, Trading View

The pair is trading with an overall downward trend, recording lower lows. The general bearish trend on the daily chart will only change if the price rises and records a daily close above 1.11550. Conversely, a rise to 1.11224 increases the likelihood of a decline to continue the bearish trend towards a target of 1.10199.