EUR/USD: Elevated forecasts for US CPI set to turn down the dollar
|EUR/USD has been under pressure as US yields rise once again but elevated expectations for US inflation figures may result in a disappointment, weighing on the dollar, FXStreet’s Analyst Yohay Elam briefs.
See: EUR/USD has the 55-DMA at 1.1976 in its sights – OCBC
There is room for EUR/USD to rise
“Investors are hyped up ahead of the release of US Consumer Price Index figures for March due out on Tuesday, awaiting inflation to lift its ugly head. The US dollar is already on the rise ahead of the release, rising alongside bond yields.”
“With healthy demand for US debt and calming messages from the Fed, it seems that the upside driver for the greenback is only expectations for the upcoming CPI release. On this background, a ‘buy the rumor, sell the fact’ response in the dollar is a plausible outcome. For EUR/USD, it means further upside potential.”
“German Chancellor Angela Merkel's CDU/CSU political bloc is split on who would lead the party in September's general elections as the ‘locomotive’ of the old continent continues grappling with COVID-19.”
“Hopes for an accelerated vaccination campaign and potentially robust estimates from the German ZEW Economic Sentiment statistics for April may keep the common currency bid.”
“Resistance awaits at April's peak of 1.1920, followed by 1.1950, which was a high point in late March. Support is at 1.1860, the bottom of the current range, followed by 1.1820.”
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