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• Germany’s inflation accelerates to 6.4% in June, while Italy and Spain see slower price increases
• Core inflation rates remain persistently high across European economies
• Concerns persist regarding the potential economic impact of the ECB’s tightening measures
• ECB expected to implement two additional rate hikes in July and September
• Lagarde highlights the need for more evidence of underlying inflation before further policy decisions

The euro exhibits rotational behavior at the start of the Asian trading session, testing swing lows against the dollar in search of potential absorption and aiming to reach the upper-level prior VWAP close. The dollar remains relatively unchanged today, providing mixed signals, while the negative volatility of the euro suggests a possible bullish session. In the medium-term perspective, the currency maintains a bullish sentiment.

The divergence between the US Federal Reserve, which has paused its rate hike cycle, and the European Central Bank, which continues with further rate increases, has bolstered the euro’s bullish stance against the dollar. Any hawkish remarks from the US could potentially strengthen the dollar.

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