EUR/USD Forecast: Eyeing US inflation and entering overbought conditions


  • EUR/USD has been extending its gradual gains as the greenback loses ground.
  • US inflation is left, right, and center for the currency pair today.
  • Wednesday's four-hour chart shows EUR/USD is entering overbought conditions.

EUR/USD may have been listening to President Donald Trump's complaints about the weak euro – or more likely extending its gains as speculation about a Fed rate cut mounts ahead of a critical release today. The world's most-popular currency pair is trading close to the 11-week high of 1.1348 recorded on Friday.

Trump has praised low levels of inflation – and that will come to test today. Consumer prices are expected to remain steady in the publication for May with Core CPI remaining at 2.1% year on year. Fed Chair Jerome Powell has labeled poor inflation in the first quarter as "transitory" and April's rise in core price has vindicated. The release is due one week ahead of the FOMC gathering.

See 

ECB President Mario Draghi has left the stage to US inflation and the Fed. Draghi has spoken in Frankfurt this morning and refrained from touching on monetary policy. However, he did reiterate that global trade has been facing headwinds.

And indeed, trade wars have been intensifying. China has devalued the yuan in a move that may be interpreted as a part of its struggle with the US and contrasting Trump's claim that China "badly wants a deal" while he is holding it back. Chinese inflation came out at 2.7% year on year, as expected. 

Overall, without critical euro-zone indicators due today, the stage is set for US inflation to set the tone.

EUR/USD Technical Analysis

EUR USD technical analysis June 12 2019

EUR/USD enjoys upside momentum on the four-hour chart but the Relative Strength Index is getting close to 70 – overbought territory – and this implies a potential slide. 

1.1348 was the high point on Friday and remains a critical line. A break above it would send EUR/USD to the highest levels since late March. The next cap is at 1.1395 was a swing high back then. It is followed by 1.1445. 

1.1325 held the pair down in mid-April and is the immediate support line. Next, we find the round number of 1.1300 which supported it on Tuesday, and 1.1285 which supported it earlier. 1.1250 and 1.1220 are next.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex Analysis

Editors’ Picks

EUR/USD extends its gains toward 1.1300 after the dovish Fed decision

EUR/USD has extended its gains after the Fed opened the door to cutting interest rates, stating that uncertainties have increased. Markets are awaiting EU leaders to divvy up top jobs.

EUR/USD News

GBP/USD holds onto gains after retail sales, ahead of the BOE

GBP/USD has extended its gains above 1.2700 after the Fed opened the door to rate cuts. UK retail sales fell by 0.5% in May as expected. The BOE's decision and two more rounds of the Conservative contest await traders.

GBP/USD News

USD/JPY rebounds from multi-month lows, continues to trade below 108

Fed's dovish shift continues to weigh on the greenback. 10-year US Treasury bond yield plummets to lowest level since November 2016. Wall Street looks to open sharply higher on Thursday.

USD/JPY News

FOMC: Prelude to a rate cut?

The Federal Reserve added little new to its policy prescript in Wednesday’s FOMC statement and economic projections and with the anticipation for a July rate cut long priced into market levels the reaction was decidedly uninvolved.

Read more

Gold eases from multi-year tops, still well bid near $1380 level

Gold built on the post-FOMC upsurge and rallied to near six-year tops during the Asian session on Thursday, albeit retreated a bit thereafter.

Gold News

Majors

Cryptocurrencies

Signatures