Euro Tests Multi-Year Highs Ahead of Key Macroeconomic Data

Amid waning interest in the US dollar and growing expectations of dovish rhetoric from the Federal Reserve, the euro continues to strengthen, rapidly approaching multi-year highs. Both the EUR/USD and EUR/CAD pairs are showing steady growth ahead of the release of eurozone inflation data, which could confirm the stability of price dynamics and boost investor confidence in the region’s currency.

The consensus forecast suggests that the Core Consumer Price Index (Core CPI) for June will hold steady at 2.3%, with the headline figure not exceeding 2.0%. Should the data match expectations, this may reinforce investor confidence in price stability across the eurozone and support the euro’s ongoing rally. Market focus is also directed towards a series of speeches from ECB officials and Federal Reserve Chair Jerome Powell, which could further influence pricing in the mentioned currency pairs.

EUR/USD

The EUR/USD pair has confidently broken above its recent high at 1.1750, testing a key resistance level at 1.1800. If the current news backdrop and support around the 1.1600–1.1700 range remain intact, the pair may continue its upward movement towards the 1.1900 mark. Technical analysis of EUR/USD indicates strong bullish momentum; however, such movement may also be accompanied by sharp corrective pullbacks and heightened volatility.

Key events that could impact EUR/USD pricing today:

• 10:40 (GMT+3): Speech by European Central Bank Vice-President Luis de Guindos
• 11:00 (GMT+3): Eurozone Manufacturing PMI
• 12:00 (GMT+3): Eurozone Consumer Price Index (CPI)
• 16:30 (GMT+3): Speech by ECB President Christine Lagarde

EUR/CAD

The EUR/CAD pair has also rallied sharply, reaching 2018 highs near the 1.6000 level. The Bank of Canada's lack of a hawkish stance and the neutral tone of recent economic reports are contributing to capital flows in favour of the euro. Technical analysis suggests the pair may test the 1.6100 mark if the current upward momentum continues. However, a downward correction may begin either from current levels or near 1.6100, as the pair has not traded above these levels since 2018.

Events likely to influence EUR/CAD pricing today:

• 11:15 (GMT+3): Speech by Bundesbank President Joachim Nagel
• 16:30 (GMT+3): Speech by Federal Reserve Chair Jerome Powell
• 18:00 (GMT+3): Canada’s Budget Balance Report

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