Forecast: How will U.S. producer prices data impact EUR/USD?

NEW YORK (Forex News Now) – The Labor Department is due on Thursday to release a key monthly report on U.S. producer prices, in one of the day’s spotlight FX news events.

The department’s Producer Price Index, which measures prices paid at the factory and farm gate, is expected to slide 0.2 percent month-on-month in June, according to two global forex news outlets, after a decline of 0.3 percent in May.

The department is scheduled to publish the report at 12:30 P.M. GMT; as such, this leading indicator of economic health is likely to dominate much of European afternoon currency trading.

According to forex analysis, should the report show a greater-than-expected drop in producer prices, EUR/USD could be pushed down toward support around Tuesday’s low, 1.2523.

But if the data shows a slighter-than-expected drop in producer prices, or even growth, the currency pair could be lifted toward resistance around the high of May 5, 1.2996.