The US dollar is also struggling broadly this week as flows from the Iran-Israel war unwind on the ceasefire. The rally in the euro is part of a broader trend that kicked off on higher German fiscal spending following this year's election and Trump's trade war. A look at the monthly chart highlights the impressive gains from a double bottom at 1.02.
Critical in that calculation will be US inflation data, starting with tomorrow's PCE report. If tariff impacts are absorbed without significantly boosting prices, then a series of rate cuts could weigh on the dollar. At the moment, the market is pricing in 104 bps in easing in the coming year but that's been volatile and changeable. This week, Fed Governor Bowman indicated that she would be willing to cut in July, boosting the dovish path.
As for the chart, the monthly image above highlights little in the way of major resistance until 1.20 or 1.22. This week's strong rebound to new long-term highs is also a positive sign.
This article was written by Adam Button at www.forexlive.com. Read More Details
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