• Market sentiment is downbeat and major US equity indices are down, putting a lid on the EUR/USD price.
  • US inflation numbers were slightly lower than expected.
  • US CPI excluding food and energy shrank from 4.3% to 4%.
  • Questions whether the Fed will stick to a bond tapering announcement in September surface.

EUR/USD advances slightly during the New York session, trading at 1.1822, up a modest 0.10% at the time of writing. Before American traders got to their desks earlier in the session, the common currency reached a new weekly high at 1.1845, though it retreated some of its gains, sitting above the Monday high.

The market sentiment is downbeat, with commodity-linked currencies losing against the greenback white US significant equity indices post losses between 0.17% and 0.72%.

US CPI figures lower than expected, caused a knee-jerk reaction

Across the pond, the US inflation numbers were released. The CPI on a monthly basis was 0.3%, a tick lower than the forecasted while excluding food and energy CPI shrank to 0.1% from 0.3% foreseen. On an annual basis figures, CPI remains unchanged at 5.3%, while the CPI excluding food and energy contracted from 4.3% in the previous reading to 4%. 

This set of data proves right Fed Chair Jerome Powell’s thesis that inflation will be “transitory”. Moreover, the retracement of the EUR/USD after reaching the weekly high could signal that investors still bet on the normalization of the monetary policy in the US, this meaning that the Fed could announce a bond tapering at the FOMC September’s meeting.

In the Eurozone economic docket, lower impact data was released. Spain’s HICP came at 3.3% year-over-year, in line with expectations, while the monthly basis was 0.4% higher than the -0.7% foreseen by economists. 

During the European session, the German Bundesbank President Jens Weidmann commented about the digital euro and the possible disruption of the banking sector. 

"A gradual approach might make sense given the risks involved – that means a digital euro with a specific set of features and the option to add further functionalities later," Weidmann told a conference.

Regarding monetary policy, Weidmann made no comments.

KEY TECHNICAL LEVELS TO WATCH

EUR/USD

Overview
Today last price 1.1822
Today Daily Change 0.0011
Today Daily Change % 0.09
Today daily open 1.1811
 
Trends
Daily SMA20 1.179
Daily SMA50 1.1801
Daily SMA100 1.1939
Daily SMA200 1.1998
 
Levels
Previous Daily High 1.1817
Previous Daily Low 1.177
Previous Weekly High 1.1886
Previous Weekly Low 1.1802
Previous Monthly High 1.19
Previous Monthly Low 1.1664
Daily Fibonacci 38.2% 1.1788
Daily Fibonacci 61.8% 1.1799
Daily Pivot Point S1 1.1782
Daily Pivot Point S2 1.1752
Daily Pivot Point S3 1.1735
Daily Pivot Point R1 1.1829
Daily Pivot Point R2 1.1846
Daily Pivot Point R3 1.1876

 

 

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