EUR/USD trimmed recent gains on Wednesday, stepping lower after clipping fresh highs for the year as broad-market anticipation of Federal Reserve (Fed) rate cuts in September keeps broad-market risk appetite pinned to the ceiling.

There is little of note on the economic calendar for the middle range of the trading week, but Thursday will bring an update on US Gross Domestic Product (GDP) figures, which will be closely watched. However, little movement is expected as markets have broadly priced in Q2 annualized GDP growth to hold steady near 2.8%.

Friday’s data docket shows promise for markets slipping into a boredom trance, with a fresh print of pan-EU Harmonized Index of Consumer Prices (HICP) inflation due early in the European market session. Core EU HICP inflation is expected to continue trimming lower across the board, forecast to print at 2.8% YoY in August compared to the previous print of 2.9%.

US Personal Consumption Expenditure Price Index (PCE) inflation due on Friday remains the week’s key print, and investors are shuffling their feet while they wait for signs that inflation will continue to ease, or at least not rise, fast enough that the Federal Reserve (Fed) will be kept on rails to deliver a hotly-anticipated rate cut on September 18.

EUR/USD price forecast

EUR/USD slipped back below the 1.1150 level on Wednesday as bidders struggle to keep the Fiber moving north. The pair is still testing the waters well north of the 200-day Exponential Moving Average (EMA) at 1.0850, but a sustained slide will quickly see price action tumble back to the 50-day EMA near 1.0940.

EUR/USD daily chart

(Click on image to enlarge)

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