EUR/USD Price Forecast: Eyes on $1.0856 as Core CPI and Employment Data Loom

European Inflation and U.S. Core PCE: Major Drivers to Watch

Today’s trading session will be influenced by significant economic data releases from both the Eurozone and the United States. Key metrics include:

• Eurozone Core CPI Flash Estimate (3:00 pm GMT): Forecasted at 2.6%, a marginal dip from the previous 2.7%. Any deviation here could impact EUR/USD as traders assess inflationary pressures within the Eurozone.

• Eurozone CPI Flash Estimate (3:00 pm GMT): Projected to show a slight increase to 1.9% from 1.7%. Rising inflation numbers could fuel speculation on the European Central Bank’s future rate path, supporting the euro if above expectations.

• U.S. Core PCE Price Index (5:30 pm GMT): Expected at 0.3% month-over-month, compared to 0.1% previously. As the Federal Reserve’s preferred inflation gauge, any increase here could spark U.S. dollar strength, putting pressure on EUR/USD.

• U.S. Initial Unemployment Claims (5:30 pm GMT): Expected at 229,000, slightly above the previous 227,000. Higher claims could hint at labor market softening, potentially weakening the dollar.

• Chicago PMI (6:45 pm GMT): Forecasted at 46.9, up slightly from 46.6. A strong reading could indicate resilience in manufacturing, supporting dollar sentiment.

U.S. Non-Farm Payrolls and ISM Manufacturing to Cap the Day

In addition to these midday data releases, traders will watch the following key figures later today:

Key events for #EURUSD this week
– German Prelim CPI, US Advance GDP (Wednesday)
– Eurozone Flash CPI, US Core PCE (Thursday)
– US #NFP and #Fed rate anticipations (Friday)
– #USElection2024 volatility

Last month's German and Eurozone CPI pushed the EUR/USD pair down nearly 440… pic.twitter.com/HCWWSwdlV1

— Razan Hilal, CMT (@RH_Waves) October 30, 2024

• Average Hourly Earnings: Expected at 0.3% growth, slightly below the prior 0.4%.

• Non-Farm Employment Change: Forecasted at a subdued 108,000, down from 254,000. A significantly lower print may suggest cooling in the U.S. job market, potentially weighing on the dollar.

• ISM Manufacturing PMI and Prices: Projected at 47.6 and 48.9, respectively. Strong figures here would highlight ongoing manufacturing demand, potentially bolstering the dollar.

Technical Summary and Market Sentiment

• Support Level: 38.2% Fibonacci retracement at $1.0846 offers robust support.

• Immediate Resistance: Levels to watch are $1.0856, with an extended target at $1.0880 if momentum sustains.

• RSI Insight: RSI at 57 shows moderate strength, allowing room for upside if bullish sentiment continues.

In conclusion, EUR/USD could strengthen if it remains above $1.0846, with the outlook turning increasingly bullish if it breaks through $1.0856.