EURUSD remains close to critical support at 1.0900 focus on US inflation Data.

In Monday’s European session, the EURUSD remained in a tight range above round-level support at 1.0900. Despite the lack of Eurozone top-tier economic data. The major currency pair has remained in a tight range over the past week.

US annual headline and core inflation are estimated to have slowed somewhat in July.

This week’s Eurozone economic calendar will include revised estimates of flash Q2 GDP and preliminary employment change statistics. Which will be released on Wednesday.
According to forecasts, the Eurozone economy grew by 0.3% on quarter. Consistent with flash numbers and the growth rate seen in the first quarter of this year. Meanwhile, the Employment Change, a percentage metric. That indicates a growth in new payrolls, is predicted to rise at a slower rate of 0.2% compared to the previous release of 0.3%.
Moreover Strong GDP and employment data benefit the Euro (EUR) because they limit the likelihood of future policy easing by the European Central Bank (ECB).

The European Central Bank is projected to lower interest rates twice more this year.

The ECB has already shifted to policy normalization. And investors are looking for indications that indicate how far the central bank may lower its main borrowing rates.
Furthermore Currently, financial markets expect the ECB to decrease interest rates twice more this year. Last week, the Finnish ECB policymaker, Olli Rehn “Rate cuts would help the eurozone economy recover. In particular the “fragile” industrial growth and subdued investments,” Reuters reported.

Daily market movers: EURUSD Consolidates with US Inflation is in focus.

EURUSD is trading sideways above the round-level support of 1.0900. The major currency pair is struggling for direction. As investors hunt for new indications at the start of a busy data week that will most likely reveal how much the Federal Reserve (Fed) will lower interest rates in September.
Investors are looking for new interest rate clues from the July Consumer Price Index (CPI) data in the United States (US), which will be released on Wednesday. Economists predict monthly headline and core inflation, which excludes volatile food and energy prices, to rise by 0.2%. Annual headline and core CPI are expected to have decreased by one-tenth to 2.9% and 3.2%, respectively.

Fed is largely expected to begin lowering its key borrowing rates in September.

Currently, the Fed is largely expected to begin lowering its key borrowing rates in September, as Fed policymakers appear to have gained confidence that price pressures will return to the intended rate of 2%. Officials have also admitted that the labor sector now faces downside risks.
According to the CME FedWatch tool, 30-day Federal Funds Futures price data reveals that traders expect a 46.5% possibility of interest rates falling by 50 basis points (bps) in September, down from 85% a week earlier. Expectations for a significant Fed rate decrease have diminished as fears of a potential US recession have subsided.
Also, Fed Officials have underlined that the size and timing of rate decreases will be determined by economic data, not than the recent volatility in equities markets.