Euro on the Move:US CPI Figures and the Federal Reserve's Shadow

Euro on the Move: US CPI Figures and the Federal Reserve's Shadow

In the dynamic landscape of the foreign exchange market, the Euro has adopted a moderately positive tone during the European morning trade, surging towards intra-day highs near 1.0810. This surge comes as the US Dollar experiences a loss of footing, setting the stage for a crucial market juncture ahead of the release of US Consumer Price Index (CPI) figures. As I write this article, the Euro is hovering at 1.0806, indicating the evolving nature of currency markets in real-time.

US CPI Figures: A Pivotal Moment for the Dollar

Later today, the spotlight turns to the US Bureau of Labor Statistics, poised to announce key inflation figures that could significantly sway the course of the US Dollar. Forecasts anticipate a slight dip in US inflation to 3.1% in the twelve months leading up to November, with the core CPI expected to hold steady at 4%. These figures take center stage, with all eyes on Wednesday's impending Federal Reserve monetary policy decision.

Investor speculation regarding the potential timing for a Federal Reserve pivot is the primary driving force behind the FX markets. Against this backdrop, any surprises in the inflation trends could exert a substantial impact on US Dollar crosses, making the upcoming CPI figures a critical juncture for traders and investors alike.

Technical Analysis: Euro's Battle with the 50 SMA

Technically, the Euro remains entrenched in a bearish trend, persisting below the 50-day Simple Moving Average (SMA). The key question that traders are eagerly watching is whether the Euro will break through the resistance level at 1.08177, a crucial threshold that could potentially signal a shift in the prevailing trend.

Looking Ahead: Bearish Setup or Rebound Potential?

As we look ahead, the bearish setup persists, with the Euro seemingly poised for potential downside. The upcoming CPI reports hold the key to unraveling this mystery, offering insights into whether the Euro will continue its bearish trajectory or find support for a possible rebound from the 1.072 area.


In the unfolding narrative of the Euro's movements, the convergence of technical analysis and impending fundamental events creates a dynamic and uncertain atmosphere. The Euro's journey, marked by its interaction with the 50 SMA and the impending US CPI figures, underscores the intricate dance of currencies in the global market. As traders brace for potential volatility, the US Dollar's fate hangs in the balance, awaiting the crucial cues from both economic data and the Federal Reserve's policy decision.


Our preference

Short positions below 1.08600 with targets at 1.0740 & 1.0720 in extension.