The EUR/USD pair is currently in a consolidation phase, awaiting signals.
The market has reached an equilibrium point and is now eagerly awaiting news.
Next week, both the US Federal Reserve and the European Central Bank will hold meetings. The market anticipates that the Fed may halt interest rate hikes due to slowing inflation. The probability of a 25 basis point rate increase is currently at 99.8%. However, the possibility of the same increase at the September meeting is only 14%, and 26% in November. On the other hand, the ECB is expected to continue raising rates, as its signals regarding the inflationary environment remain uncertain.
Yesterday, the final eurozone inflation data for June was released, with the official CPI remaining at 5.5% year-on-year. However, core prices saw an increase to 5.5% year-on-year from the previous 5.4%, indicating that inflation continues to remain uncontrolled.
For the euro, the ECB's continued sentiment for a rate hike is a positive signal. Conversely, the signs of the tight cycle coming to an end are viewed as a burden for the US dollar. From a fundamental perspective, the market's most traded currency pair is poised for further growth.
