The US Bureau of Economic Analysis (BEA) is scheduled to reveal the April data for the Personal Consumption Expenditures (PCE) Price Index on Friday at 12:30 GMT. This index is the preferred measure of inflation for the Federal Reserve (Fed). The core PCE Price Index, which excludes volatile food and energy prices, is expected to increase by 0.1% in April, following a flat reading in March. The core PCE inflation is also forecasted to decline from 2.6% to 2.5% over the last twelve months. Additionally, the annual headline PCE inflation is predicted to decrease from 2.3% to 2.2%. As this data is a significant factor in the Fed’s policy decisions, it is closely watched by the market. In the press conference after the May meeting, Fed Chairman Jerome Powell remarked that inflation is still above their target and they anticipate continued upward pressure. Powell also stated that they will wait for more clarity before making any decisions due to uncertainty regarding tariffs. Ahead of the PCE inflation report, TD Securities has predicted a slight increase in core PCE prices by 0.1% in April, following a flat reading in March that will be later revised higher. The annual core PCE inflation is expected to rise to 2.6%. Additionally, it is predicted that personal spending will return to normal levels after a surge of 0.7% in March caused by front-loading. Earlier in the week, New York Fed President John Williams expressed his desire to avoid persistent inflation because it could become permanent. Meanwhile, Minneapolis Fed President Neel Kashkari stated his support for maintaining interest rates until there is more clarity on the impact of increased tariffs on inflation. If the monthly core PCE Price Index, which is not affected by base effects, has an unexpected reading, it is likely to trigger a reaction from market participants. If the reading is 0.3% or more, the US dollar (USD) may experience an immediate increase in value. Conversely, a reading of 0% or below may result in the USD weakening against major currencies. According to the CME FedWatch Tool, there is a minimal chance of a Fed rate cut in June, but there is a 25% chance of a cut in July. This suggests that the USD still has potential for further gains if the monthly core PCE reading exceeds expectations. However, if the PCE data shows lower inflation and eases concerns about a persistent trend, investors may reconsider the likelihood of a rate cut in July. FXStreet’s European Session Lead Analyst, Eren Sengezer, offers a brief technical analysis for EUR/USD. The daily chart shows that EUR/USD is trading above the 20-day Simple Moving Average (SMA) and the Relative Strength Index (RSI) is slightly above 50. This indicates a lack of selling pressure. The first support level is at 1.1200, followed by 1.1015-1.1000. Resistance levels to watch out for include 1.1400, 1.1500, and 1.1575.