EUR/USD – The Euro Just Hit a One-Year Low, and Today's Data Could Push It Lower

EUR/USD has fallen to around 1.1360, its lowest level in a year. The driver is a resurgent US dollar. After the Fed (Federal Reserve) signaled potential rate hikes this year, capital has flowed into the dollar, and the euro has slipped against it.

There's a twist. The European Central Bank (ECB) raised its own rates just two weeks ago — a move that typically lifts a currency. But it hasn't helped the euro, because dollar strength is simply overwhelming everything else right now.

Today brings the next test. The US releases the PCE (Personal Consumption Expenditures) report — the inflation measure the Fed watches most closely. Forecasts point to a hot reading, partly due to an earlier spike in energy prices. If inflation comes in high, it reinforces the case for more rate hikes and a stronger dollar, pushing EUR/USD lower still. If it comes in soft, the euro could bounce as pressure on the dollar eases.

EUR/USD key levels:

• Resistance: 1.1450, then 1.1550.
• Support: 1.1350, then 1.1260.

Watching: today's US PCE report, US rate-hike expectations, and dollar dynamics.

By Born2trade market research department

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