Euro remains strong despite weak US PCE Prices Index

• The Euro remains steady at mid-term highs as US inflation​ and spending data ⁤disappoint.
• US⁣ PCE inflation eases beyond expectations and cements hopes‌ of​ Fed ‍cuts in early 2025.
• Better-than-expected US Durable​ Goods Orders are keeping the Greenback ⁢from ​a deeper depreciation.

The ‍Euro (EUR) is soaring after an initial dip following mixed US data. The pair remains steadfast at fresh four-month highs above 1.1010‌ at Friday’s United ‌States (US) ‍session opening, with the Dollar ⁣weighed down ⁢by the‍ weak US Personal Consumption⁣ Expenditures (PCE) Prices Index and Personal⁤ Spending data.

After an initial drop, the pair recovered as the ‌better-than-expected US Durable Goods orders report boosted the Dollar‌ only temporarily.‌ The market recognized that these figures raise the possibility⁤ of Federal Reserve (Fed) cuts in early ⁢2024, causing the Dollar to lose its ​initial traction.

Recent data has indicated that the US economy is‍ growing at a slower pace than previously estimated ⁤in the third quarter.​ Weaker manufacturing data and signs of easing inflation support the theory⁣ of a soft​ landing ahead.

Daily digest⁤ market movers: US PCE Inflation and Spending data adds​ pressure on the USDollar

• US PCE Prices Index contracted against expectations in November, with the year-on-year rate easing to 2.6%, below the 3.8% ⁢market‍ consensus, from 3% in the ⁣previous month.
• The Core PCE increased 0.1%, steady from the previous ​month, and 3.2% on the year, following a 3.5% reading in October. The market had anticipated⁢ 0.2% and⁣ 3.3% readings respectively.
• US ⁣Personal Spending ‍grew at⁤ a 0.2% pace from 0.1%⁤ in October, below the consensus 0.3% reading.
• On the positive side, US Durable Goods Orders ⁤beat expectations with a 5.4%‍ increase ⁣in November, following a 5.1% decline in October. Market analysts ‍expected a more moderate 2.2% growth.
• On​ Thursday, ⁢US Q3 GDP was revised to a 4.9% annualized growth from the previous 5.2% ​estimate.
• The Philadelphia Fed Manufacturing‌ index dropped to⁣ -10.5 ​in December‌ from -5.9​ in November; the market expected ​a moderate improvement to -3.
• Investors are pricing a ‌nearly 75% chance of a quarter-point rate cut in March⁤ and 150 bps cuts in 2024, according ​to the CME Group Fed Watch Tool.

Technical Analysis: Euro breaks 1.1010 resistance, eyes 1.1070

Euro bulls have gathered strength on Friday’s ​European session, to break above ​November and December’s peak, at 1.1010. The Dollar⁣ Index (DXY)‌ dipped to fresh lows and after US Personal Spending and PCE Prices Index figures confirmed the disinflationary trend.

A ​confirmation above 1.1010 would ⁤shift bulls’ focus towards the ‍early⁣ August high at 1.1070, and the ⁣July ‌24 and 27 peak,  ⁣at 1.1150.

To the downside, support levels‍ are 1.0930 ​ahead of a key support area above the 4-hour 100 Simple Moving⁣ Average (SMA) at‌ 1.0870. Below here,

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