The EUR/USD pair is consolidating around the 1.1800 mark during Wednesday’s Asian session, easing slightly after touching 1.1830 on Tuesday—its highest level since September 2021. The modest pullback reflects a minor rebound in the US Dollar amid better-than-expected US economic data.
The US Dollar Index (DXY), which had been on a consistent downtrend since June 19, bounced slightly and is now trading near 96.70. This comes after data revealed an uptick in US manufacturing activity. The ISM Manufacturing PMI rose to 49.0 in June from May’s 48.5, surpassing forecasts of 48.8. Additionally, the JOLTS job openings surged to 7.76 million in May, well above the expected 7.3 million and April’s 7.395 million reading—bolstering confidence in the US labor market.
Investors now await the June ADP Employment Change report, which could further influence near-term dollar movement and EUR/USD direction.
Policy Outlook: Cautious Fed vs. Settling ECB
Fed Chair Jerome Powell signaled that the US central bank will remain data-dependent but did not dismiss the possibility of a rate cut as early as July. Meanwhile, US Treasury Secretary Bessent hinted at a likely rate cut before September, fueling further speculation about imminent Fed easing.
On the European side, Eurozone inflation matched expectations at 2.0%, aligning perfectly with the European Central Bank’s (ECB) target. In a notable shift, ECB Chief Economist Philip Lane indicated that the central bank’s tightening cycle has likely ended, reinforcing a neutral stance going forward.
Trade Talks in Focus: EU-US Tariff Negotiations Progress
Geopolitical developments also remain a key theme. The European Union is reportedly open to a 10% uniform tariff deal on many of its exports, provided the US offers concessions on sensitive sectors like pharmaceuticals, semiconductors, alcohol, and aerospace.
EU Commissioner Maros Sefcovic is expected to meet US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick in Washington to continue pushing the talks forward before the mid-July deadline set by the US administration. Any breakthrough in these negotiations could have significant implications for the EUR/USD pair, especially if trade tensions ease.
📊 EUR/USD Technical Snapshot
- Resistance: 1.1830 (multi-year high), followed by 1.1865
- Support: 1.1765, then 1.1700
- Outlook: Neutral-to-bullish bias as long as the pair holds above 1.1765
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