The EUR/USD pair continued to decline for a second consecutive day as the US Dollar strengthened. The pair experienced a significant drop of 1.57% over the weekend, bringing it down to around 1.0750.
The Euro faced pressure due to the recent EU Parliamentary elections, which created uncertainty in the markets regarding future policymaking. With a light economic calendar in the EU, all eyes are now on the upcoming Federal Reserve (Fed) rate decision and the release of the Fed’s interest rate projections.
Market expectations suggest a 51% chance that the Fed will keep rates unchanged in September, following last week’s decrease in rate cut hopes. Investors are eagerly awaiting the Fed’s update on its interest rate expectations and the US Consumer Price Index (CPI) inflation data, which is expected to show a slight cooling.
From a technical perspective, the EUR/USD pair is currently trading near 1.0770 after falling below the 200-day Exponential Moving Average (EMA) at 1.0806. Any potential rebounds are likely to face resistance at the descending trendlines from previous highs around 1.1140.
Overall, the EUR/USD pair is facing downward pressure amid a strengthening US Dollar and uncertainty surrounding future Fed decisions. Traders will be closely monitoring upcoming economic data releases for further direction in the currency pair.