The PCE inflation report is scheduled for release at 12:30 GMT, on June 30. Previewing this publication, “the Federal Reserve watches PCE – so financial markets also examine it closely. The higher it goes, the greater the chance for further rate hikes and thus a stronger US Dollar. The Greenback would lose value against its peers on a lower read,” said FXStreet Analyst Yohay Elam.
EUR/USD gathered bullish momentum in June and climbed above 1.1000 before going into a consolidation phase. FXStreet Analyst Eren Sengezer offers a brief technical outlook for the pair and explains:
“Following EUR/USD lackluster performance this week, the Relative Strength Index (RSI) indicator on the daily chart declined to 50, highlighting a buildup of bearish momentum. Additionally, the pair was last seen trading near the 20- and the 50-day Simple Moving Averages (SMA) after having closed the last 10 trading days above those levels”
Eren also highlights the important technical levels for EUR/USD: “In case the pair turns south on a strong PCE inflation report, a daily close below 1.0850 (50-day SMA, 20-day SMA) could attract sellers. In that case, additional losses toward 1.0800 (psychological level, 100-day SMA) and 1.0700 (end-point of May-June downtrend) could be witnessed.”
“On the upside, 1.1000 (static level, psychological level) aligns as strong resistance before 1.1060 (end-point of March-May uptrend) and 1.1100 (2023-high).”
PCE inflation related content
US Dollar Index: DXY depicts pre-data anxiety near 13-day top above 103.00, Fed inflation gauge eyed
EUR/USD Price Analysis: Euro again bounces off 50-EMA as EU/US inflation figures loom
Atlanta Federal Reserve Bank President Bostic: Inflation has fallen
About the Core Personal Consumption Expenditures Price Index
The Core Personal Consumption Expenditures released by the US Bureau of Economic Analysis is an average amount of money that consumers spend in a month. "Core" excludes seasonally volatile products such as food and energy in order to capture an accurate calculation of the expenditure. It is a significant indicator of inflation. A high reading is bullish for the USD, while a low reading is bearish
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