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EUR/USD slips toward 1.1650 as traders await US PCE data
Core PCE is forecast to rise 3.3% year over year in July, keeping markets focused on the odds of a September rate hike.
EUR/USD was weak in early European trade, hovering around 1.1665 as a rebound in the US dollar weighed on the pair.
FXStreet reports traders are turning cautious ahead of the release of the key US July Personal Consumption Expenditures, or PCE, Price Index later on Wednesday, with economists expecting inflation to remain sticky due to ongoing Middle East energy risks.
The outlet notes that core PCE, excluding food and energy, is projected to increase 3.3% year over year in July, and hotter readings could strengthen the case for a September US rate hike, which would likely support the greenback against the euro.
FXStreet also highlights that CME FedWatch pricing shows nearly a 38.4% probability of a 25 basis point hike in September, down from 67% earlier in the month, and points to upcoming guidance from Federal Reserve Chair Kevin Warsh at Jackson Hole on Friday.
On the technical side, analysts at UOB Group say EUR/USD broke out of a tight recent range, with price action shifting after the euro dipped to 1.1650 and later settled near 1.1674, suggesting tentative upward momentum.
UOB now sees scope for a near term test of 1.1695, while identifying support around 1.1665 and 1.1655 and noting resistance near 1.1710 is unlikely to be breached.
Latest closeEUR/USD 1.157 ▲0.4%