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On the eve of the "data three-shot", the euro defended 1.17, and the referees such as the US dollar blew the whistle.
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Official Website]: On the eve of the "Data Three www.xmhouses.combo", the euro defended 1.17, and the referees such as the US dollar blew the whistle". Hope it will be helpful to you! The original content is as follows:
On Wednesday (September 10), the euro/dollar (EUR/USD) market recurred around the 1.1700 line before the market, with a small fluctuation. Geographical disturbances in the eastern wing of Europe and the adjacent US inflation data jointly suppress risk appetite, and exchange rate fluctuations are in a pattern of "message-driven-data pricing". The market's high attention to the US PPI (Wednesday) and CPI (Thursday) has made traders more cautious in their direction choices; at the same time, news about Poland shooting down suspected Russian drones in the area bordering Belarus has amplified hedging demand and posed additional upward resistance to the euro.
Fundamentals: Inflation and interest rate paths become the main axis, geopolitical and revised data provide secondary disturbances
1) Inflation prospect
The latest consensus shows that the US August PPI monthly rate is expected to drop significantly from 0.9% in July to 0.3%, maintaining 3.3% year-on-year; the core PPI is expected to be 0.3% and 3.5% year-on-year, down from the previous 0.9% and 3.7%. In terms of CPI, the overall monthly price rate in August is expected to rise from 0.2% to 0.3%, and from 2.7% to 2.9% year-on-year; the monthly rate of core CPI is expected to remain 0.3% and 3.1% year-on-year. In the window of the Fed's interest rate agenda, these two data are the "last puzzle" to evaluate the pace of monetary easing. If prices at the production and consumer ends are more in a synchronous manner, the market will revisit the shadow of stagflation of "inflation stickiness + slowdown in demand"; if both fall slightly, it will provide verification for the baseline of "soft landing + gradual interest rate cuts".
2) Labor market repricing
The U.S. Bureau of Labor Statistics (BLS) disclosed on Tuesday, 2025 3The total non-farm employment in the first 12 months was revised down by 911,000 www.xmhouses.compared with previous estimates. This benchmark correction strengthens the judgment that "the labor market is cooling faster", and the market almost locks in the interest rate cut of 25 basis points next week, while retaining the tail probability of 50 basis points "strike" on the desktop. For the foreign exchange market, if the marginal slowdown in inflation and employment cooling parallel, the premium of the US dollar interest rate spread will weaken, which will be conducive to the euro's temporary rise; on the contrary, if inflation gets hot again, the US dollar will gain new dual support for safe haven and interest rates.
3) European side factors
At the geopolitical level, reports on Poland's shooting down suspected Russian-made drones near the border have limited immediate impact on the market, but concerns about NATO's marginal friction escalating tendencies to raise risk aversion, which is negative for the euro's psychology. At the policy level, the ECB is expected to remain unchanged on Thursday, with the main refinancing rate remaining at 2%. The market is more concerned about the wording of the Lagarde press conference - if it is clear that "the end rate has reached and the growth risk is paid attention to", it will be in the same direction as the Federal Reserve's potential interest rate cut, and the interest rate spread is driven to be conducive to the repair of the euro.
4) Event path and market interpretation
www.xmhouses.combined with timeline: Wednesday PPI → Thursday CPI and the European Central Bank → next week's Federal Reserve. Under this sequence, the data-central bank guidance-implementation resolution will gradually calibrate the pricing of the path to at least two interest rate cuts this year. Any overexpected outcome could trigger a rebalancing of volatility expansion and spread trading.
Technical surface: The daily chart shows that the middle rail of the Bollinger band is 1.1669, the upper rail 1.1745, and the lower rail 1.1593; the current K-line entity is close to the upper rail, and the exchange rate is back-testing near the middle rail - tug-of-war. The recent high of 1.1779 corresponds to a multi-week high, while the previous low of 1.1391/1.1356 constitutes a more medium-term structural support. MACD shows DIFF0.0019, DEA0.0015, and histogram 0.0009. The double lines tend to bond and flatten after a slight golden cross near the zero axis, with limited release of kinetic energy, showing a sideways trend; RSI (14) is 52.9663, which is slightly stronger in the neutral zone, and no overbought/oversold signal is seen. The Bollinger band diameter has not been significantly opened, indicating that the Bollinger band extrusion has not been lifted yet and the volatility is still in a mild state.
Technically, 1.1669 is the first dynamic support level (Bolling middle track); if it falls below, it will look down at 1.1593 (Bolling lower track) and test the early intensive trading range; 1.1745 (Bolling upper track) above is the primary resistance level. Further breakthroughs require a large volume and confirmation with the physical positive line before challenging the peak of 1.1779. In terms of form, the K-line www.xmhouses.combination in the past two weeks is more like the oscillation and consolidation in the rectangle/box, and the direction selection may wait for an effective breakthrough triggered by inflation data.
Future Outlook
The data is mild—"soft landing" baseline
If PPI and CPI are as expected or lower than expected, www.xmhouses.combined with the cooling signal of 911,000 of the non-agricultural downward revision, the probability of the Federal Reserve's 25bp rate cut will solidify next week; then "at least one more drop in the year."The sequence of times is confirmed. Under this path, the interest rate spread advantage of the US dollar weakens, the euro benefits relatively, and the exchange rate is expected to build a step-by-step rise above 1.1669, and try to initiate a volume breakthrough for 1.1745/1.1779. However, if the European Central Bank simultaneously releases more dovish growth concerns, the positive correlation suppression of European bond yields-Euro is still there, and the upward slope of the euro will be more moderate. In the medium term, if the subsequent economic recovery of the euro zone is synchronized with the decline in US inflation, the upward channel is expected to gradually take shape.
Inflation is hot-solid-"stick inflation" scenario
If PPI/CPI unexpectedly higher than expected, the market will reconsider whether the Federal Reserve's "50bp big-step rate cut has been postponed", and the US dollar regains the dual-wheel drive of interest rate expectations + safe-haven, and the euro is easy to fall and difficult to rise. In line price, 1.1669 is lost and looks to 1.1593. If the volume breaks down and the backtest fails, the daily line will turn to the downward channel test's previous low point cluster 1.1391/1.1356. In this scenario, traders need to pay attention to the risk of false breakthroughs and dead cat jumps - that is, the rebound that stretches quickly after the data but is not good enough, which is easy to be pushed back near the Bollinger middle track.
The above content is all about "[XM Forex Official Website]: On the eve of "Data Three-Strike", the Euro defends 1.17, and the US dollar and other referees blow the whistle". It was carefully www.xmhouses.compiled and edited by the editor of XM Forex. I hope it will be helpful to your trading! Thanks for your support!
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