EUR/USD edges lower amid trade deal reports & ahead of the ECB rate decision. FTSE hits a record high.EUR/USD is edging modestly lower after three days of gains amid optimism that the European Union is nearing a deal with the US, which would impose 15% tariffs on EU goods entering the United States. This would be considerably lower than the 30% that Trump threatened on August 1st. This comes after Trump announced the trade deal with Japan earlier in the week.On the date of the front Eurozone PMIs came in stronger than expected, with the composite PMI, which is considered a good gauge for business activity, rising to 251 in July, up from 50.6. The services PMI rose to 51.2, up from 50.5, whilst manufacturing came in at 49.8, up from 49.5. Suggesting a modest improvement in the eurozone economy across the month, despite uncertainties surrounding U.S. trade.Attention now turns to the ECB interest rate decision, where the central bank is widely expected to leave interest rates unchanged at 2% after seven consecutive rate cuts, given the uncertainties surrounding the trade outlook.The markets will be closely watching for clues about the future path of rates. The market is currently pricing in one more rate cut, which could occur in September, by which time the EU-U.S. trade deal should have been finalized, and new projections will be available.EUR/USD Forecast – Technical AnalysisEUR/USD has rebounded from the 1.1550 low, moving back up towards the 1.1830, a 4-year high reached at the start of the month. However, momentum is showing signs of slowing.Buyers will need to extend gains above 1.18 to re-enter the rising channel and test 1.1830. A rise above here creates a higher high, opening the door to 1.19.Meanwhile, sellers will need to break below 1.1580 support to create a lower low.FTSE Hits A Record HighThe FTSE 100, along with its European peers, is heading higher, hitting a fresh record high above 9150, driven by optimism around a potential US-EU trade deal.Reports suggest that both sides are moving towards a 15% tariff agreement, which will include some exemptions. These latest reports follow the US and Japan’s agreement on a trade deal reached earlier this week, which involves the US implementing 15% tariffs on Japanese imports.Trade agreements with the EU and Japan mitigate some of the downside risk associated with the looming August 1st tariff deadline.Strong corporate earnings are lifting the mood, with Reckitt Benckiser (LON:RKT) surging 10% after upgrading its outlook thanks to strong sales and cool brands. Meanwhile, BT is also up 5% following results, which show encouraging trends.On the front line, UK services and composite PMI figures fell short of expectations, indicating slowing growth in private sector activity. Meanwhile, the manufacturing PMI was slightly stronger than expected, showing that the contraction in manufacturing activity slowed.FTSE 100 Forecast - Technical AnalysisFTSE 100 has extended its rally from the 7535 April low to record highs of 9150. The RSI has tipped into overbought territory, so buyers should be cautious.With blue skies above, buyers will look to extend gains towards 9200.Immediate support is seen at 9100 round number and the 9000 psychological level. Below here 8900, the June high comes into play.Original Post