EUR/USD
turns
sideways
around
1.0800
in
Wednesday’s
European
session
after
a
modest
corrective
move
from
an
almost
four-week
high
of
1.0850.
The
major
currency
pair
shifts
to
the
sidelines
as
investors
await
the
United
States
(US)
Consumer
Price
Index
(CPI)
data
for
June,
which
will
be
published
on
Thursday.
Economists
expect
that
core
inflation,
which
excludes
volatile
food
and
energy
items,
grew
steadily
by
0.2%
and
3.4%
on
a
monthly
and
annual
basis,
respectively,
in
June.
Annual
headline
inflation
is
estimated
to
have
decelerated
to
3.1%
from
May’s
reading
of
3.3%,
while
the
monthly
figure
is
expected
to
have
grown
by
0.1%
after
remaining
unchanged
previously.
The
inflation
data
will
provide
cues
as
to
whether
current
expectations
that
the
Federal
Reserve
(Fed)
will
start
reducing
interest
rates
from
the
September
meeting
are
appropriate.
Meanwhile,
Fed
Chair
Jerome
Powell
signaled
in
his
commentaries
at
the
semi-annual
Congressional
testimony
on
Tuesday
that
rate
cuts
are
not
appropriate
until
policymakers
gain
significant
confidence
that
inflation
is
on
course
to
return
to
the
desired
rate
of
2%.
However,
Powell
warned
about
easing
US
economic
strength
as
the
labor
market
loses
momentum.
Powell
said
“Labor
market
conditions
have
cooled
considerably
compared
to
where
they
were
two
years
ago,”
and
added
that
the
US
“is
no
longer
an
overheated
economy.”
EUR/USD
trades
in
a
tight
range
slightly
above
the
round-level
support
of
1.0800
as
investors
stay
on
the
sidelines
ahead
of
the
US
CPI
report
for
June.
The
major
currency
pair
stabilizes
above
the
20-day
and
50-day
Exponential
Moving
Averages
(EMAs),
which
trade
around
1.0750
and
1.0770,
respectively.
The
overall
trend
of
the
shared
currency
pair
has
also
strengthened
as
it
has
jumped
above
the
200-day
EMA,
which
trades
around
1.0800.
A
Symmetrical
Triangle
formation
on
the
daily
timeframe
exhibits
a
sharp
volatility
contraction,
which
indicates
low
volume
and
narrow
ticks.
The
14-day
Relative
Strength
Index
(RSI)
reaches
60.00.
Should
the
bullish
momentum
be
triggered
if
it
breaks
above
60.00?
The
European
Central
Bank
(ECB)
in
Frankfurt,
Germany,
is
the
reserve
bank
for
the
Eurozone.
The
ECB
sets
interest
rates
and
manages
monetary
policy
for
the
region.
The
ECB
primary
mandate
is
to
maintain
price
stability,
which
means
keeping
inflation
at
around
2%.
Its
primary
tool
for
achieving
this
is
by
raising
or
lowering
interest
rates.
Relatively
high
interest
rates
will
usually
result
in
a
stronger
Euro
and
vice
versa.
The
ECB
Governing
Council
makes
monetary
policy
decisions
at
meetings
held
eight
times
a
year.
Decisions
are
made
by
heads
of
the
Eurozone
national
banks
and
six
permanent
members,
including
the
President
of
the
ECB,
Christine
Lagarde.
In
extreme
situations,
the
European
Central
Bank
can
enact
a
policy
tool
called
Quantitative
Easing.
QE
is
the
process
by
which
the
ECB
prints
Euros
and
uses
them
to
buy
assets
–
usually
government
or
corporate
bonds
–
from
banks
and
other
financial
institutions.
QE
usually
results
in
a
weaker
Euro.
QE
is
a
last
resort
when
simply
lowering
interest
rates
is
unlikely
to
achieve
the
objective
of
price
stability.
The
ECB
used
it
during
the
Great
Financial
Crisis
in
2009-11,
in
2015
when
inflation
remained
stubbornly
low,
as
well
as
during
the
covid
pandemic.
Quantitative
tightening
(QT)
is
the
reverse
of
QE.
It
is
undertaken
after
QE
when
an
economic
recovery
is
underway
and
inflation
starts
rising.
Whilst
in
QE
the
European
Central
Bank
(ECB)
purchases
government
and
corporate
bonds
from
financial
institutions
to
provide
them
with
liquidity,
in
QT
the
ECB
stops
buying
more
bonds,
and
stops
reinvesting
the
principal
maturing
on
the
bonds
it
already
holds.
It
is
usually
positive
(or
bullish)
for
the
Euro.
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