Market Overview

EUR/USD Trying to Stabilize Ahead of ECB, NFPs


The USD experienced a decline on Friday following the release of the US Manufacturing PMI, a key indicator of economic health, which came in at 47.8, below the expected 49.5. This lower figure could potentially ease inflationary pressures, bringing the market closer to anticipating a rate cut by the Fed. Additionally, earlier in the week, the US Core PCE Price Index met expectations, registering at 2.8%, albeit down from the previous reading of 2.9%. This prompts speculation regarding when the Fed might decide to take action, or how long it will maintain current interest rates. More insight may be gained following the release of the US ISM Services PMI tomorrow and the US NFP report on Friday. Moreover, this week also features the ECB rate decision, with members displaying a more hawkish stance. This raises questions about whether the EURUSD pair could witness further upward movement. Presently, there are indications of a modest recovery on an intraday basis, with bunds also showing signs of stabilization. Consequently, I am considering the possibility of further upside for the EURUSD pair, while the dollar could continue its intraday decline amid a risk-on environment.


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