USD loses ground: investors await Powell’s speech and inflation data

The EURUSD rate corrected slightly on 9 July 2024 but remains at a three-week high as pressure on the US dollar persists.

EURUSD trading key points

• Market focus: Federal Reserve chair’s speech on monetary policy
• US consumer inflation expectations dropped from 3.2% to 3.0% in June
• EURUSD price targets: 1.0840, 1.0900, and 1.0944

Fundamental analysis

The US dollar remains under pressure from the released weak employment market statistics. In addition, consumer inflation expectations for the next year decreased for the second consecutive month, reaching 3.0% in June 2024 compared to 3.2% in May. The decline is primarily driven by falling prices in many economic sectors.

Today, traders will closely watch Federal Reserve Chair Jerome Powell, who will present the six-month monetary policy report to the US Senate Banking Committee. Investors expect comments on the balance between elevated inflation risks and a potential economic slowdown. The consumer price release due on Thursday may also significantly influence markets, as the previous reports have shown price growth rates slowing from their peaks at the start of the year.

EURUSD technical analysis

On the EURUSD H4 chart, a consolidation range continues to develop above 1.0860, a crucial level for the EURUSD pair today, 9 July 2024. The price is expected to break above the range, with a growth structure developing towards the local target of 1.0900. After reaching this target, the price could fall to 1.0840 (testing from above). Subsequently, another growth structure might follow, aiming for 1.0944.

Summary

Traders are focused on the upcoming speech by Federal Reserve Chair Jerome Powell. The market awaits Powell’s comments on the monetary policy and the release of consumer price data, which may shed light on the further economic outlook. Technical indicators point to a potential further correction in the EURUSD pair to the 1.0840, 1.0900, and 1.0944 targets.