empty
InstaForex Loprais Team - Official participant of the Dakar rally
InstaForex Loprais Team - Official participant of the Dakar rally
This section is designed for those who are just starting their trading journey. InstaForex educational and analytical materials will meet your training needs. Our experts' recommendations will make your first steps to trading success simple and clear.
Start as Beginner
How to start trading
Useful information
Training and recordings
InstaForex innovative services are an essential element of productive investment. We strive to provide our clients with advanced technical capabilities and make their trading routine comfortable as we are recognized as the best broker in this regard.
Become Investor
PAMM System
ForexCopy System
Passive investments
Partnership with InstaForex is beneficial and top-tier. Join our affiliate programs and enjoy bonuses, partner rewards, and the possibility to travel with the team of the world-renowned brand.
Become Partner
Main Page
Partner Area
Advantages for Affiliates
Registration
This section contains the most lucrative offers from InstaForex. Receive bonuses when topping up an account, compete with other traders, and get real prizes even when trading in a demo account.
All Promo Campaigns
Bonuses
Contests
Events
Holidays with InstaForex are not only pleasant but also useful. We offer a one-stop portal, numerous forums, and corporate blogs, where traders can exchange experiences and become successfully integrated into the Forex community.
Full details
Forums
We are in social networks
Forex humour
Forex Portal
InstaForex is an international brand created in 2007. The company provides services for online FX trading and is recognized as one of the world's leading brokers. We have won the trust of more than 7,000,000 retail traders, who have already appreciated our reliability and focus on innovations.
Learn More
History
Why Choose Us
InstaSport
Regulation
Company News
Awards
InstaForex Stars
InstaForex Offline
Headquarters
Key documents
Social Responsibility
14.08.2024 12:18 AM
Euro on the Offensive
Open trading account Open demo account

Much ado about nothing. In anticipation of the release of the US Producer Price Index, there were many speculations about a strong market reaction to inflation surprises. In reality, the unexpected slowdown in the PPI resulted in a modest attempt by EUR/USD to break out of the short-term consolidation range of 1.088–1.094. The bulls didn't achieve significant gains on their first attempt. Should they wait until Wednesday for the CPI data to be released?

In July, producer prices slowed to 0.1% month-over-month and 2.2% year-over-year. The core PPI remained unchanged compared to June and increased by 2.3% over 12 months. The significant aspect is the first reduction in service inflation in a long time. The figures suggest a developing disinflationary process in the US and provide the basis for the futures market to increase the probability of a 50 bps rate cut by the Federal Reserve in September from 49% to 54%.

The futures market still believes that the Fed will cut borrowing costs by 100 bps in 2024, which implies activity at each of the three remaining FOMC meetings this year. In 12–18 months, the rate is expected to fall to 3%, a clear bullish signal for EUR/USD.

Market Expectations for the Federal Funds Rate

This image is no longer relevant

Goldman Sachs considers such forecasts overstated and views the market reaction to the US employment data for July as excessive. In reality, there is no talk of a recession in the US. The American economy appears weaker than before, but GDP can still grow above trend. This performance allows the Fed to avoid rushing into easing monetary policy. As soon as the market realizes it, the story of early 2024 with the strengthening of the U.S. dollar will repeat itself. In this regard, Goldman Sachs recommends selling EUR/USD.

This strategy is supported by the decline in investor confidence in the German economy in August to its lowest level since January amid turmoil in global financial markets. As a pro-cyclical currency, the euro reacts strongly to deteriorating global economic conditions. If the US, China, Japan, and Germany face trouble, EUR/USD will likely head south.

Dynamics of Investor Confidence in the German Economy

This image is no longer relevant

This image is no longer relevant

However, the release of the data on the US Consumer Price Index will answer all the questions. This opinion is present on Forex, but, as with the PPI, it may be much ado about nothing. Investors gradually shift their focus from inflation to recession, so the market reaction might be muted. We'll wait and see.

Technically, on the EUR/USD daily chart, the bulls' failure to break the resistance at the pivot level of 1.0945 indicates weakness among the bulls. However, a second attempt might be more successful, so a re-entry into long positions after successfully testing the upper boundary of the 1.0880-1.0940 consolidation range is worth considering.

Marek Petkovich,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
All Analytics
Analytical News
US Market News Digest for May 13 Citigroup shares are posting steady gains after breaking above key technical levels, signaling potential for continued upside. Market participants view the bank's stock as promising amid signs of stabilization
Ekaterina Kiseleva
12:38 2025-05-13 +02:00
1225
Analytical News
NRG Energy soars after $12 billion deal — new players in energy? Indices rise: Dow 2.81%, S&P 500 3.26%, Nasdaq 4.35% Stocks outperform safe havens on trade easing Apple rises on report of considering iPhone price hike Wall Street fear gauge dips
Thomas Frank
12:11 2025-05-13 +02:00
1150
Breaking Forecast Trading Plan Cryptocurrencies USD/RUB Russian Economy Video Analysis
Trading Instruments
EURUSD GBPUSD USDCHF USDCAD USDJPY AUDUSD EURGBP EURJPY NZDUSD EURNZD Silver Gold #CL #USDX COVID-19 Bitcoin
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

EUR/USD. Analysis and Forecast

Today, the EUR/USD pair is showing signs of recovery but continues to face challenges as the U.S. dollar strengthens amid progress in trade negotiations between the United States and China
Irina Yanina 11:08 2025-05-13 UTC+2

USA and China: A 90-Day Truce. U.S. Inflation Report in Focus (High probability of a decline in EUR/USD and GBP/USD)

On Monday, the markets breathed a sigh of relief following the announcement of a trade agreement between the United States and China. The deal involves mutual tariff reductions, but only
Pati Gani 10:07 2025-05-13 UTC+2

The Market Hits the Jackpot!

Bingo! No one could have dreamed of such an outcome from the U.S.-China meeting—not even in their most optimistic fantasies. The reduction of U.S. import tariffs from 145% to 30%
Marek Petkovich 09:20 2025-05-13 UTC+2

GBP/USD Overview – May 13: The British Pound Takes a Low Blow

The GBP/USD currency pair plummeted rapidly on Monday. The U.S., represented by Treasury Secretary Scott Bessent, announced the first signs of progress in trade negotiations with China. Following a bilateral
Paolo Greco 07:30 2025-05-13 UTC+2

EUR/USD Overview – May 13: The U.S. And China Unexpectedly Reached an Agreement

On Monday, the EUR/USD currency pair dropped sharply, like a rock falling. Can you guess who deserves the credit for that? It's none other than Donald Trump. Though this time
Paolo Greco 07:30 2025-05-13 UTC+2

What to Pay Attention to on May 13? A Breakdown of Fundamental Events for Beginners

Quite a few macroeconomic events are scheduled for Tuesday, but most are expected to have only a minor impact on the movement of both currency pairs. As a reminder
Paolo Greco 05:59 2025-05-13 UTC+2

EUR/USD. The Dollar Is Back in the Saddle. But for How Long?

The greenback is back on top: the U.S. Dollar Index hit a four-week high on Monday, responding to the announcement of a three-month truce in the trade war between
Irina Manzenko 01:01 2025-05-13 UTC+2

China Helped the Dollar Halt Its Decline

The CFTC report released on Friday showed minimal changes in overall currency positioning, with the net USD position against major currencies decreasing by a symbolic $0.1 billion to—$17.2 billion
Kuvat Raharjo 00:24 2025-05-13 UTC+2

The Dollar Takes Time to Saddle Up but Rides Fast

Investors have shifted from the "Sell America" strategy that emerged after the White House imposed tariffs to "Buy America" amid positive developments in U.S.-China trade relations. While the S&P
Marek Petkovich 00:23 2025-05-13 UTC+2

Bitcoin Has Completed Its Minimum Task

Bitcoin has broken above the 100,000 mark, entered a consolidation phase, and confirmed the familiar pattern. Previously, after breaking through psychologically significant levels, the cryptocurrency experiences a period of stagnation
Marek Petkovich 00:23 2025-05-13 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
Callback widget