EUR/USD breaks below 1.2300 on US CPI

US CPI rose 2.1% in January.
US retail sales contracted 0.3%.
Spot drops to lows near 1.2270.

Pablo Piovano FXStreet

The greenback accelerated its upside momentum on Wednesday, dragging EUR/USD to test fresh lows in the 1.2380/70 band.

EUR/USD weaker on upbeat US CPI

Spot gathered downside traction after US CPI surprised investors to the upside in January, showing headline consumer prices rising at an annualized 2.1% and 0.5% inter-month.

Prices stripping food and energy costs also came in on the strong side, up 1.8% over the last twelve months and 0.3% on a monthly basis.

On the not-so-bright side, retail sales contracted 0.3% MoM during last month vs. a forecasted 0.2% expansion, while core retail sales came in flat, also below consensus.

The pair corrected lower to the 1.2270 area, or daily lows, soon in the wake of the publications and is now looking to stabilize around 1.2300 the figure.

EUR/USD levels to watch

At the moment, the pair is losing 0.42% at 1.2300 facing the immediate support at 1.2276 (low Feb.14) seconded by 1.2206 (low Feb.9) and finally 1.2165 (low Jan.18). On the flip side, a break above 1.2393 (high Feb.14) would target 1.2524 (high Feb.1) en route to 1.2537 (2018 high Jan.25).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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