EUR/USD Drops Below 1.0900, Attention Turns to U.S. Inflation Data
2023.06.29 15:00
The pair came under pressure on Thursday and broke below the 1.0900 level to touch its lowest level in six days following the release of better-than-expected US data and another round o hawkish comments from the Fed Chair.
At the time of writing, the EUR/USD pair is trading at the 1.0875 area, 0.36% below its opening price, posting its second daily decline in a row.
Data from the US fueled the narrative that the economy remains resilient and helped to lift the dollar during the New York session. First-quarter annualized US Gross Domestic Product () growth was upwardly revised from 1.3% to 2%. Meanwhile, dropped to 239,000, the lowest level in four weeks. The Personal Consumption Expenditures () price index, the Fed’s preferred inflation gauge, will be released on Friday.
Moreover, Federal Reserve Chairman Jerome Powell echoed recent hawkish comments during a speech in Madrid on Thursday. He noted that even though inflation has moderated somewhat, the process of getting inflation back down to the 2% target still has a long way to go.
From a technical perspective, the EUR/USD short-term bias looks neutral to slightly bullish, according to indicators on the daily chart, which have turned south but remain in positive territory. With the price losing the 1.0900 area, the next critical support is seen at the 20-day simple moving average (SMA) at around 1.0840, followed by the 100-day SMA at 1.0815.
On the other hand, the 1.0900 level remains a key short-term threshold, followed by weekly highs in the 1.0970-80 region and the 1.1000 psychological level.
