Market Fundamental Analysis for July 6, 2026 EURUSD

Event to watch today:

17:00 EET. USD – ISM Services PMI

EURUSD:

June data from the euro area provide a mixed but broadly supportive backdrop for the euro. The services activity index rose to 49.4 from 47.7 in May, while the composite indicator returned to growth. Inflation slowed to 2.8%, but the ECB raised interest rates in June and still has room to maintain a cautious policy stance. The improvement in business activity supports the single currency, although the weakness in the services sector has not fully disappeared.

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The main shift for EURUSD has come from a reassessment of the US economy. Employment growth in June was weaker than expected, while previous months were revised lower. This reduced the perceived likelihood of a Federal Reserve rate hike by September. The US dollar came under pressure, and the release of the Federal Reserve’s June meeting minutes will test whether the market maintains this revised outlook.

Slower euro-area inflation limits the euro’s upside potential. However, less confident Federal Reserve expectations, the ECB’s June rate increase, and stronger composite business activity create a favourable fundamental balance for the pair. Unless new US data challenge the view of a cooling labour market, the outlook remains tilted towards further EURUSD strength.

Trading idea: BUY 1.1435, SL 1.1405, TP 1.1525

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