Jakarta, GIC Trade – The euro slipped below $1.09, nearing a six-week low after the July Fed meeting minutes suggested the U.S. central bank could raise interest rates again amid significant inflation risks.
 
Meanwhile, in Europe, investors are divided on whether the ECB will proceed with another rate hike due to worsening economic outlook. Recent data showed that core inflation in the Eurozone did not slow down in July as anticipated, while economic data, particularly for Germany, indicated weak prospects.
 
At the same time, during its July meeting, the ECB dropped guidance that borrowing costs would continue to rise, with President Lagarde indicating the September outcome would either be a pause or an increase.
 
Currently, the EUR/USD pair has moderately increased around 1.0880 ahead of the European session on Monday. Market participants are awaiting Germany’s Producer Price Index (PPI) data, expected today. The monthly figure for July is anticipated to increase with a -0.2% decline, while the annual figure is forecasted to drop by 5.1%.
 
Last week, the Eurozone’s preliminary GDP for Q2 met expectations at 0.3% QoQ and 0.6% YoY. Meanwhile, Eurozone Industrial Production for June MoM rose to 0.5%, compared to the -0.1% market consensus and the prior 0.0%. Monthly Industrial Output increased by 0.5% versus the estimated -0.1% decline.
 
Finally, July’s Harmonized Index of Consumer Prices annually was 5.3% versus the previous 5.5%, while core figures remained at 5.5%, as expected. Easing inflationary pressures in the Eurozone, as per Eurostat data released Friday, reduced pressure on the European Central Bank to continue raising rates.
 
This, in turn, has led to weakness in the euro against its peers and serves as a headwind for EUR/USD.
 
Analisis Teknikal



On the 1-hour chart, EUR/USD attempts an upward move, reaching the resistance level at 1.08950 and aiming for the next resistance at 1.09180. The upward trend is also indicated by the FXBot template, showing the EUR score higher at 8.1 against the USD’s 4.2. Additionally, the bullish bias is supported by a buy signal marked by a green arrow.
 
This Forex analysis provides insights based on fundamental and technical views by the author and is not intended as advice. For more information, click the image below.