EURUSD: Strong U.S. Data Supports USD, All Eyes on PCE

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EURUSD: Strong U.S. Data Supports USD, All Eyes on PCE

From our analysis during the FOMC meeting, EURUSD formed only a false bullish breakout, as I explained earlier, and has already reached two of our targets.

U.S. data has been strong for a long time, but the dollar has been held back by speculation around interest rates—a key reason it hasn’t taken a clear direction.

Now that the Fed has started its rate-cutting cycle, the door is open for two more cuts.

Today’s PCE data will be important, as it is likely to influence the dollar’s momentum.

The Core PCE inflation month-to-month is expected to rise 0.2% vs 0.2% previous , and year-on-year is expected to rise 2.9% vs 2.9% previous.

The headline PCE inflation (all items) is forecast to tick up to 2.7% YoY, up from 2.6%
Core PCE is the Federal Reserve’s preferred inflation gauge, a surprise above expectations could affect rate policy signaling.

Inflation remains above the Fed’s 2% target, with core PCE holding near 2.9%.
The “old structure” of tariff pass-through continues — rising import prices may push up core goods inflation over time

Standard Reaction:
Upside inflation surprise → USD strength;
Downside surprise → USD could weaken.

You may find more details in the chart!
Thank you and Good Luck!