The currency pair falls near 1.1665 in early trading, pressured by a stronger USD and caution before key US inflation data.
The EUR/USD pair declined to 1.1665 during early European trading on Wednesday, retreating from recent highs as the US Dollar (USD) regained strength. Overbought signals in the pair contributed to the downward pressure, with traders adopting a cautious stance ahead of the US July Personal Consumption Expenditures (PCE) Price Index report.
Prior to the release, the pair had shown resilience, but the rebound in the USD and anticipation of the PCE data— a key inflation metric—weighed on sentiment. The report is closely watched by the Federal Reserve for signs of persistent inflation, which could influence future monetary policy decisions.
Markets remain on edge as the data may provide further clarity on the Fed’s rate-cut trajectory, with potential implications for currency movements.