EUR/USD flat after US PPI numbers

Peter Bukov Axiory Global Ltd.

The EURUSD pair showed no real volatility today and was totally flat on the day, changing hands at 1.1740.

Traders paid attention to today's US PPI data. After soaring to a record high of 7.3% YoY in June, PPI was expected (like Core CPI) to moderate modestly to +7.2% YoY in July. Instead, July's PPI soared to a new record +7.8% YoY (up 1.0% MoM).

Core PPI (ex Food, Energy, & Trade Services) rose 0.9% monthly (almost double the expected pace of inflation) sending it up a record 6.1% year-on-year.

The greenback advanced in the initial reaction but failed to hold gains, and the EURUSD pair returned to flat on the day, hovering near 1.1745.

From other news, initial jobless claims dropped to 375,000, while continuing claims dropped to a post-COVID-lockdown low of 2.866 million.

It looks like bears are having issues pushing the price below the critical support zone of previous lows in the 1.1700-1.1750 region. Therefore, risks for a meaningful bounce are increasing. The resistance is spotted at 1.18, with the next target for bulls at August highs of 1.19.

Author

Peter Bukov

Axiory Global Ltd.

Peter Bukov is one of Axiory’s leading analysts. He has a master’s degree in Corporate Finance and is highly sought after as a teacher of Forex trading at various universities in Slovakia.

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