EUR/USD Dips: The EUR/USD pair is down for the second day in a row, pressured by a resurgent US Dollar and expectations of a European Central Bank (ECB) rate cut in June.
Strong Dollar: The US Dollar Index (DXY) is climbing, buoyed by positive US economic data and expectations of the Federal Reserve maintaining a hawkish stance to combat inflation.
ECB Dovishness: Comments from ECB policymakers suggesting a possible rate cut in June are weighing on the Euro.
Limited Downside Today: Despite the headwinds, EUR/USD is holding above 1.0800 for now.
Spanish CPI on Tap: Today’s release of Spanish CPI data might offer some direction to the Euro, but the main focus remains on Friday’s US PCE Price Index for clues on the Fed’s monetary policy.
Key Levels to Watch:
- Support: 1.0800 (current level), 1.0776 (Daily Pivot Point S3)
- Resistance: 1.0864 (Previous Daily High), 1.0877 (Daily SMA 20)
Overall, the EUR/USD pair is likely to remain under pressure in the near term, with the direction heavily influenced by the upcoming US PCE data and its impact on the Dollar.