The EURUSD remains sidelined around 1.2230, up 0.03% intraday, during the first trading day of June heading into the European session on Tuesday. The currency major pair fails to cheer the US dollar weakness amid cautious sentiment ahead of the key Eurozone Consumer Price Index (CPI) and the US ISM Manufacturing PMI data for May.
Mixed sentiment concerning the inflation and stimulus, as well as the COVID-19 vaccine updates, also add to the market uncertainty. Even Though the inflation figures are less worrisome of the ECB, Friday’s US Core PCE Price Index backed tapering talks. Though, chatters surrounding US President Joe Biden’s $6.0 trillion budget, not to forget the $1.7 trillion infrastructure spending plan, keep buyer’s hopeful.
Additionally, upbeat prints of Germany’s Harmonized Index of Consumer Prices (HICP), 2.4% versus 2.5% expected and 2.1% prior, adds to the Euro power.
On the opposite side, fears over the Fed’s next moves become firmer as the Fed policymakers will observe the blackout period after this week and there has not been any strong line between the supporters of tapering and those against such moves.
This highlights today’s Eurozone CPI and US PMI as the key data ahead of Friday’s US Nonfarm Payrolls (NFP). Forecasts suggest the bloc’s inflation gauge to inch closer towards the 2.0% target versus 1.6% forecast whereas the US ISM Manufacturing PMI is likely to repeat the 60.7 level.
While Eurozone CPI should be observed for a possible upside, any disappointment from the US PMI data will be counterproductive for the US dollar and could add to the EURUSD upside. This highlights the inflation component of ISM data after successive 13 beats to the prediction.
Warning:
Trading on CFDs involves a high level of risk, including full loss of your trading funds. Before proceeding to trade, you must understand all risks involved and acknowledge your trading limits, bearing in mind the level of awareness in the financial markets, trading experience, economic capabilities and other aspects.
Disclaimer:
Market Trends, Charts, Trading Ideas or other information provided by BKFX (Pty) Ltd and/or third parties are not intended as an investment advice and/or recommendation. The information provided is not presented as suitable or based on your specific need. You are responsible for your own investment decisions and you should not trade with money you cannot afford to lose. Any views or opinions presented in this Article are solely those of the author and do not necessarily represent those of the Company, unless otherwise specifically stated. The Company may provide the general commentary which is not intended as an investment advice and must not be construed as such. Seek advice from a separate financial advisor if an investment advice is needed. The Company assumes no liability for errors, inaccuracies or omissions, inaccuracies or incompleteness of information, texts, graphics, links or other items contained within this article/material.