The dollar index was trading near a two-week low on the background of upcoming events.
Investors are awaiting the announcement of a decision by the U.S. Federal Reserve System (Fed) on further monetary policy. The inflation data published the day before confirmed the idea of a pause in interest rate hikes.
The U.S. Consumer Price Index rose by 4.0% in May, which was the lowest annual gain in more than two years. However, it is still significantly higher than the 2% target. The core CPI rose by 5.3% over the 12 months, indicating continued strong pressure on commodity costs.
On Tuesday, Fed officials met for the first time in 15 months, without preplanned interest rate increases to consider.
According to the CME Fedwatch tool, currently the chance of maintaining the regulator's target rate unchanged in the range of 5% to 5.25% is 95.4%.
The U.S. Federal Reserve System is expected to announce its interest rate at 2:00 p.m. GMT. The market is more interested in the regulator's future plans.
The European Central Bank (ECB) will make its decision on monetary policy on Thursday at 10:15 a.m. GMT. The rate is expected to rise by 0.25 points to the 4% level.
Since the interest rate hike has already been taken into account by the market, the main focus will be on the ECB Press Conference. Market participants are waiting for a consecutive plan to control inflation and economic forecasts from the regulator. Expectations of this event can support the European currency.
EURUSD pair quotes are in an uptrend on the H1 timeframe. The price bounced back from trend support, indicating a continuing trend.
In terms of wave analysis, the currency pair is in the process of the third ascending wave formation on the H1 timeframe. A strong news background corrects the movement, which is not typical for the third wave. The price broke through the top of the first wave at 1.0785, indicating a possible rise in the EURUSD rate.
Signal:
The short-term prospects of the EURUSD pair are to buy.
The target is at the level of 1.0870.
Part of the profit should be fixed near the level of 1.0825.
The stop-loss is at the level of 1.0750.
Bullish trend has a short-term character, so the volume of trade should not exceed 2% of your balance.
This content is for informational purposes only and is not intended to be investing advice.
