The EUR/USD pair is quite volatile. However, its quotes continue to move up, reaching 3 months high at 1.14 area. The US dollar's gains are expected to be short-lived despite the Fed's decision to keep its interest rate cut on hold.
Ahead of the G20 meeting, the euro failed to sustain momentum against the greenback. The European Commission proposed an EU budget of €168.3 billion for 2020. With a focus on smart and inclusive growth. Although Europe lags behind in economic growth compared to other major world economies, it does well in the Inclusive Development Index Where GDP can overlook inequality - the Inclusive Development Index aims to include it.
The euro has lowered after the release of weak economic data. Today German prelim CPI report is going to be published. The reading is expected to be unchanged at 0.2% and Spanish flash CPI to remain unchanged as well at 0.8%. Tomorrow, the index of import prices in Germany will be published. The figure is expected to decrease to -0.1% from the previous value of 0.3% and French Consumer Spending is expected to drop to 0.0% from the previous value of 0.1%.
At the same time, the US Federal Reserve is facing difficulties due to low inflation and Trump's constant demands to cut the interest rates. Market participants are reluctant to make any predictions
Some economists suppose that the Fed is likely to cut its key rate at the July meeting this year. Fed Chairman Powell pointed out that sudden rate cut may worsen the economic growth.
Investors are awaiting the US and China meeting. China and the United States have already imposed tariffs of up to 25% on hundreds of billions of dollars of each other's goods in a trade war that has lasted nearly a year. Relations between Washington and Beijing have spiraled downward since talks collapsed in May when the United States accused China of reneging on pledges to reform its economy.
Today, US Final GDP report is going to be published. The reading is expected to be unchanged at 3.1% and Final GDP Price Index is also expected to be unchanged as well to 0.8%. Moreover, unemployment claims are expected to rise to 220k from the previous figure of 216k and Pending Home Sales is expected to grow to 1.1% from the previous value of -1.5%.
What is more, the US currency is unlikely to be influenced by the upcoming reports while the euro may, on the contrary, decline.
Now let us look at the technical view. The price continued to push lower after retest and reject off the 1.1400 area with a daily close. Yesterday the price closed with indecision forming a Doji candle pattern but today it managed to regain bearish pressure and continue to decline. As for Mean Reversion, while forming Bearish Regular Divergence, the price is expected to push lower towards 1.1300 area before showing any bullish signs to push higher. As the price remains below 1.1400 area with a daily close, the bearish pressure is expected to continue.
