EUR/USD Rises as US PCE Data Matches Expectations.
EUR/USD ticks up as markets absorb US PCE inflation figures that matched expectations.
FUNDAMENTAL OVERVIEW:
The Euro (EUR) advanced modestly against the US Dollar (USD) on Friday, extending its intraday gains as traders digested the latest US Personal Consumption Expenditures (PCE) inflation report, which broadly aligned with expectations and provided limited fresh direction.
At the time of writing, EUR/USD trades near 1.1690, rebounding from three-week lows with gains of about 0.20%. Meanwhile, the US Dollar Index (DXY), which measures the Greenback’s strength against six major currencies, eased to around 98.25 after touching its highest level since September 3 on Thursday.
The August PCE report confirmed that price pressures remain sticky, though broadly aligned with forecasts. The Fed’s preferred gauge, the core PCE Price Index, rose 0.2% month-on-month, in line with estimates and a step down from July’s initially reported 0.3%—later revised to 0.2%. On an annual basis, core inflation held steady at 2.9%, above the Fed’s 2% target.
Headline PCE increased 0.3% MoM, also meeting expectations, while the annual rate edged higher to 2.7% from 2.6% in July. The report further showed personal income rising 0.4%—slightly above forecasts—and personal spending climbing 0.6%, signaling resilient consumer demand.
Looking ahead, traders will focus on the University of Michigan’s consumer sentiment and inflation expectations survey, as well as remarks from Fed Governor Michelle Bowman, for additional policy cues.
EUR/USD TECHNICAL ANALYSIS CHART:
Technical Overview:
EUR/USD is trading within a down channel.
EUR/USD is moving below all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in Selling Zone, while the Stochastic oscillator suggests Positive trend.
Immediate Resistance level: 1.1740
Immediate support level: 1.1632
HOW TO TRADE EUR/USD
EUR/USD, after a prolonged rally, faced rejection and formed a Bearish Engulfing pattern, signalling a potential bearish reversal with a firm break below a critical support zone. While the pair tried to recover, it struggled to maintain momentum and slipped back into decline. Currently, EUR/USD is pulling back and testing the upside again, but another rejection at higher levels could strengthen bearish sentiment and push the pair toward its next significant support zone. TRADE SUGGESTION- LIMIT SELL– 1.1724, TAKE PROFIT AT- 1.1671, SL AT- 1.1761
