EUR/USD Trades Near Parity After U.S. PPI Data
The shared currency is up on Wednesday, trading near parity against a weaker greenback, after U.S. PPI data showed a decline in producer inflation in August.
At the time of writing, the EUR/USD pair trades at 0.9995, with modest gains of 0.28%, after peaking at a daily high of 1.0023 earlier in the session.
The U.S. Bureau of Labor Statistics released August Producer Price Index data, which came in mixed. The PPI inflation eased to 8.7% YoY from its previous reading of 9.8% and slightly below the 8.8% expected. Meanwhile, the core PPI inflation (which excludes energy and food volatile items) slowed to 7.3% YoY from July’s 7.7%, still above expectations of 7.1%.
After Tuesday’s dollar impressive rally, in which the Dollar Index gained more than 1.5%, the DXY trades with modest losses near the 109.50 area as the 10-year bond yields eased down.
Ahead of next week’s meeting, markets participants are expecting that the Fed will continue its contractive cycle at a faster pace. The WIRP tool shows that a 75 bps hike is already priced in and that investors are betting on 34% odds of a 1% interest rate increase. No Fed officials will be on the wires until next week and with most relevant data already behind, the U.S. bond yields and risk sentiment will dictate the pace of the markets for the rest of the week.
According to the daily chart, the EUR/USD short-term technical outlook remains bearish although downward momentum is fading. The RSI holds a positive slope below its midline, while the MACD prints lower green bars.
On the downside, the next two critical support levels stand at the 0.9900 mark and the cycle low of 0.9863. To regain traction, the bulls must secure the parity level to advance to the 1.0100 psychological mark and then to the 1.0180-1.0200 zone, where the psychological level is being defended by a descending trendline.
At the time of writing, the EUR/USD pair trades at 0.9995, with modest gains of 0.28%, after peaking at a daily high of 1.0023 earlier in the session.
The U.S. Bureau of Labor Statistics released August Producer Price Index data, which came in mixed. The PPI inflation eased to 8.7% YoY from its previous reading of 9.8% and slightly below the 8.8% expected. Meanwhile, the core PPI inflation (which excludes energy and food volatile items) slowed to 7.3% YoY from July’s 7.7%, still above expectations of 7.1%.
After Tuesday’s dollar impressive rally, in which the Dollar Index gained more than 1.5%, the DXY trades with modest losses near the 109.50 area as the 10-year bond yields eased down.
Ahead of next week’s meeting, markets participants are expecting that the Fed will continue its contractive cycle at a faster pace. The WIRP tool shows that a 75 bps hike is already priced in and that investors are betting on 34% odds of a 1% interest rate increase. No Fed officials will be on the wires until next week and with most relevant data already behind, the U.S. bond yields and risk sentiment will dictate the pace of the markets for the rest of the week.
According to the daily chart, the EUR/USD short-term technical outlook remains bearish although downward momentum is fading. The RSI holds a positive slope below its midline, while the MACD prints lower green bars.
On the downside, the next two critical support levels stand at the 0.9900 mark and the cycle low of 0.9863. To regain traction, the bulls must secure the parity level to advance to the 1.0100 psychological mark and then to the 1.0180-1.0200 zone, where the psychological level is being defended by a descending trendline.
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