The euro slipped below $1.09 at the end of the second quarter as investors weighed in on conflicting euro zone inflation data and the European Central Bank’s pledge to keep raising interest rates. Headline inflation in the euro area fell to 5.5% in June from 6.1%, but core inflation rose to 5.4% from 5.3%. National inflation rates vary. In Germany, the consumer price index accelerated to 6.4% from a 14-month low in May. However, inflation slowed in Italy and France, and in Spain the rate fell to 1.9%, marking the first time that a country in the eurozone has reached the ECB’s 2% target. At the same time, traders continue to expect the ECB’s peak deposit rate to reach 4%, with another rate hike expected in July. Politicians are also hinting at a possible further increase in September. The euro ends the second quarter with little change and is slightly below the key $1.1 level.
EUR/USD Weekly Forecast July 3 — 7, 2023
Currency pair Euro/Dollar EUR/USD completes the trading week near the area of 1.0842 and continues to move as part of the fall and the completion of the formation of a large reversal pattern “Head and Shoulders”. Moving averages indicate a bullish trend. Prices have broken through the area between the signal lines up, which indicates pressure from buyers of the European currency and a likely continuation of growth already from current levels. At the moment, we should expect an attempt to develop the growth of quotes and test the resistance area near the level of 1.0935. Where is the expected rebound down and the continuation of the fall of the Euro Dollar. The potential target of the decline is the area below the level of 0.9695.
An additional signal in favor of a decrease in the EUR/USD currency pair on Forex will be a test of the resistance line on the relative strength index (RSI). The second signal will be a rebound from the upper border of the bearish channel. Cancellation of the option of falling quotes of the Euro/Dollar pair in the current trading week July 3 — 7, 2023 will be a strong growth and a breakdown of the level of 1.1265. This will indicate a breakdown of the resistance area and continued growth of the pair to the area above the level of 1.1695. With a breakdown of the support area and closing of quotes below the level of 1.0635, which will indicate a breakdown of the lower boundary of the “Head and Shoulders” reversal pattern and the beginning of the pattern with targets at the bottom.
Among the important news from America and Europe in the next trading week, which may have an impact on the EUR/USD rate, it is worth highlighting: ISM United States Manufacturing Purchasing Managers Index (PMI) ADP United States Nonfarm Employment Change, ISM United States Non-Manufacturing Purchasing Managers Index (PMI), United States Nonfarm Employment Change States Nonfarm Payrolls.
EUR/USD Weekly Forecast July 3 — 7, 2023 suggests an attempt to develop a bullish correction and test the resistance area near the level of 1.0935. Where can we expect the price to bounce down and the pair continue to fall in the Forex market to the area below the level of 0.9695. An additional signal in favor of the decline will be a test of the resistance line on the relative strength index (RSI). Cancellation of the option of falling Euro Dollar will be a strong growth and a breakdown of the level of 1.1265. In this case, we should expect the pair to continue to rise with a potential target at the level of 1.1695.
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