- EUR/USD bounces after correcting to 1.0184.
- The dollar remains weak against the main European currencies.
- Inflation and growth in the Eurozone, with higher than expected figures.
After a pullback to 1.0184. EUR/USD gained momentum and is heading to test daily highs in the 1.0250 area. The dollar remains weak in the market while European stocks and Wall Street futures continue to rise.
The focus on data
On Friday it was known that inflation in the Eurozone reached 8.9% (annual) in July, exceeding expectations of 8.7% and the core rate climbed to 4.0%. These figures contribute to reinforcing expectations of a rise of 50 basis points by the European Central Bank at the next meeting of the Governing Council.
In another report, it was known that growth in the region in the second quarter was 0.7%, higher than the 0.2% expected. The highest points were Italy and Spain, while Germany recorded data below expectations showing zero growth.
In the US on Thursday it became known that the economy contracted again in the second quarter. On Friday it will be the turn of figures for consumption, income and inflation (core price index of personal consumption expenditure), as well as consumer confidence.
Data can be important and have an impact on the market. Although they will need to show a great novelty to change the current market moment, where the optimism and the weakness of the dollar continue.
The EUR/USD is bullish but still capped for now, bullish and within recent range. The key bar located between 1.0250 and 1.0280 remains in force. If it yields, the euro would gain important support and would be ready for a return above 1.0300. If unable to overcome, then an approach to 1.0100 in the coming sessions will look like a possible scenario.
Technical levels
Source: Fx Street
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