• EUR/USD hung up on tense bidding near 1.0900.
• Bullish momentum pulls up short as Fiber fails to crack into new technical highs.
• ECB rate call in the barrel for Thursday after US data sparks renewed rate cut hopes.

EUR/USD rotated around 1.0900 on Tuesday as markets grappled with September rate cut hopes getting pinned even further into the high end after US Retail Sales figures eased in June. Markets have fully priced in the start of a Federal Reserve (Fed) rate-cutting cycle in September, with up to three quarter-point cuts expected for the year. On the European side, the European Central Bank’s (ECB) latest rate call looms ahead on Thursday.

In June, US Retail Sales remained flat at 0.0%, matching forecasts and dropping from the revised 0.3% in the previous month. This decline in Retail Sales added to the market's expectation of a rate cut at the upcoming Federal Open Market Committee (FOMC) meeting on September 18. The softening of US Retail Sales combined with a recent cooling in Consumer Price Index (CPI) data last week has increased the likelihood of a rate cut in September. According to the CME’s FedWatch Tool, the markets are now anticipating almost a 100% chance of at least a quarter-point rate reduction in September, with the possibility of up to three cuts by 2024.