EUR/USD reclaims 1.0900 as Greenback plummets on rising Fed rate cut hopes

• 
  EUR/USD
  climbed
  into
  a
  five-week
  peak
  amid
  broad-market
  Greenback
  selling.
• 
  US
  PPI
  inflation
  rose
  faster
  than
  expected
  in
  June,
  but
  investors
  pin
  hopes
  on
  rate
  cuts.
• 
  ECB
  rate
  cut
  looms
  ahead
  next
  week,
  US
  Retail
  Sales
  due
  next
  Tuesday.

Broad-market
hopes
for
an
accelerated
pace
of
rate
cuts
from
the
US

Federal
Reserve
(Fed)
reached
a
fever
pitch
on
Friday
despite
a
notable
upswing
in
US
Producer
Price
Index
(PPI)
wholesale
inflation.
The
Fiber
extended
into
a
third
straight
week
of
gains
as
investor
risk
appetite
gets
pinned
to
the
ceiling.

Forecasting
the
Coming
Week:

Fed
rate
cut
bets
and
the
ECB
should
rule
the
sentiment

June’s
core
Producer
Price
Index
(PPI)
for
wholesale
inflation
in
the
US
rose
to
3.0%
YoY,
surpassing
the
expected
2.5%.
The
previous
period’s
figure
was
adjusted
upward
to
2.6%
from
the
initial
2.3%.
Despite
the
notable
increase
in
producer-level
inflation,
market
focus
has
shifted
to
the
earlier
decrease
in
Consumer
Price
Index
(CPI)
inflation,
raising
expectations
for
a
rate
cut.

The
CME’s
FedWatch
tool
indicates
a
significant
likelihood
of
a
quarter-point
rate
cut
at
the
Federal
Open
Market
Committee’s
(FOMC)
meeting
on
September
18.
Rate
traders
are
currently
factoring
in
at
least
three
rate
cuts
by
2024,
more
than
the
one
or
two
cuts
projected
by
the
Fed
by
December.

In
other

US
economic
data
released
on
Friday,
the
University
of
Michigan’s
Consumer
Sentiment
Index
survey
dropped
to
a
seven-month
low
of
66.0,
falling
short
of
the
expected
increase
to
68.5.
This
reflects
increasing
discouragement
among
US
consumers
about
the
economic

outlook.
Additionally,
the
University
of
Michigan’s
5-year
Consumer
Inflation
Expectations
decreased
slightly
in
July
to
2.9%
from
the
previous
3.0%.
Long-term
consumer
inflation
expectations
remain
significantly
higher
than
the
Fed’s
target
annual
inflation
rate
of
2.0%

US
Retail
Sales
figures
are
on
the
docket
for
next
Tuesday,
and
Euro
traders
will
be
buckling
down
for
the
wait
to
next
week’s
latest
rate
call
from
the
European
Central
Bank
(ECB),
slated
for
early
next
Thursday.
The

ECB
recently
delivered
a
quarter-point
rate
trim
in
early
June,
but
odds
of
a
follow-up
cut
are
looking
unlikely,
and
markets
are
broadly
forecasting
a
cautious
hold
in
July.

EUR/USD
technical
outlook

EUR/USD
has
chalked
in
a
third
straight
week
of
gains,
closing
Friday
a
hair
above
the
1.0900
handle.
The
pair
has
risen
2.3%
from
late
June’s
swing
low
into
1.0666,
and
intraday
price
action
is
poised
for
a
clash
with
technical
resistance
from
June’s
early
peaks
near
1.0920.

Fiber
broken
out
of
the
topside
of
a
rough
descending
channel
on
daily
candlesticks.
Despite
closing
in
the
green
for
all
but
two
of
the
last
twelve
consecutive
trading
days,
bullish
momentum
is
poised
to
run
out
of
gas
and
could
see
a
bearish
pullback
to
the
200-day
Exponential
Moving
Average
(EMA)
at
1.0797.

EUR/USD
hourly
chart

EUR/USD
daily
chart