- The dollar fell amid increasing expectations of a Fed rate cut.
- The Euro got some relief after the first round of French elections.
- Next week, the US will release data on wholesale and consumer inflation.
The weekly EUR/USD forecast is bullish as Fed rate cut bets rise and political uncertainty eases in the Eurozone. Furthermore, mixed US data is also weighing on the dollar.
EUR/USD ups and downs
The EUR/USD pair had a bullish week as the dollar fell amid rising expectations of a Fed rate cut. Meanwhile, the euro got some relief after the first round of French elections. Market participants focused on US employment data, including private jobs, job vacancies, jobless claims and non-farm payrolls.
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However, the main report was the NFP, which showed another strong increase in employment last month. However, the unemployment rate rose to 4.1%, indicating cracks in the labor market. Following the report, the dollar fell as the probability of a September cut rose to 72%.
Next week’s key events for EUR/USD
Next week, the US will release data on wholesale and consumer inflation. The CPI and PPI reports will shape the outlook for a Fed rate cut. Last month’s inflation data showed an easing of price pressures, fueling expectations of a rate cut. However, Fed policymakers maintained their cautious outlook, pending more data.
Powell noted that inflation is on a downward trend, but policymakers need more evidence. Therefore, if price pressures ease in June, policymakers may finally be confident enough to take a dovish stance. However, if the numbers beat forecasts, it would support the Fed’s current outlook for just one rate cut this year.
EUR/USD weekly technical forecast: higher low signals change sentiment
On the technical side, the EUR/USD price bounced off the 1.0675 support level and broke above the 22-SMA. At the same time, the RSI is trading above 50, supporting bullish momentum. The price has been making lower highs and lows, indicating a downtrend.
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However, this changed with the last low at the key level of 1.0675. Here, the price made a higher low, which could indicate a change in sentiment. It shows that the bears were no longer strong enough to push the price lower.
If the bulls manage to make a higher high next week, it will confirm a new bullish trend. Moreover, the price is likely to break above the resistance level at 1.0900, allowing the bulls to revisit the resistance level at 1.1101.
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