Euro Area Wage Growth Expected to Accelerate in Second Half of Year

News of accelerating wage growth in the Eurozone could heighten concerns over persistent inflationary pressures, potentially weakening expectations for interest rate cuts by the European Central Bank (ECB). This may lead to short-term volatility in European equity markets and bond yields. While the impact on global risk appetite is expected to be limited, it is unlikely to provide direct direction for Turkish markets; however, indirect pressure on emerging market currencies could emerge.

EURUSD is trading in overbought territory with RSI above 70, increasing the likelihood of a short-term correction. Although the headline suggests wage growth will accelerate, which could support ECB tightening expectations and strengthen the euro, technical indicators point to a potential loss of momentum. Despite the price remaining above the SMA20 and SMA50, the overbought RSI signals caution. The MACD line remains above the signal line, but the narrowing gap indicates weakening bullish momentum. Therefore, upside movement is expected to be limited in the near term, with a possible pullback anticipated.

EURJPY has entered overbought territory with the RSI at 73, increasing the likelihood of a short-term correction. Although news headlines indicate that wage growth in the Eurozone is set to accelerate, this could heighten inflationary pressures and support the ECB's hawkish stance, potentially strengthening the Euro. However, the overbought signal from technical indicators suggests that upside movement may be limited. While the MACD line remains above the signal line, momentum could weaken. Therefore, a slight decline or sideways movement is expected in the near term.

EURGBP is trading just below its 20- and 50-day moving averages, with the RSI at 51 indicating a neutral stance. The MACD remains below its signal line, suggesting a lack of short-term momentum. News that wage growth in the Euro Zone is set to accelerate could support the euro by reducing expectations for ECB rate cuts. However, technical indicators do not provide a clear direction, so market reaction may be limited. Therefore, a sideways movement is expected in the near term.