EUR/USD sinks to weekly lows near 1.1380 on US CPI

EUR/USD reverses the initial optimism and breaches 1.1400.
US CPI rose 7.5% YoY in January. Core CPI gained 6.0% YoY.
US Initial Claims rose by 223K in the week to February 5.

Pablo Piovano FXStreet

The sudden bout of strength in the greenback forced EUR/USD to give away earlier gains and break below the 1.1400 support on Thursday.

EUR/USD weaker post-US CPI

EUR/USD drops to new multi-session lows after US inflation figures tracked by the CPI surprised to the upside in January, showing consumer prices rose 7.5% from a year earlier while prices excluding food and energy costs rose 6.0% also on a yearly basis.

The higher-than-expected US CPI gave extra wings to the buck and US yields and reinforce further the speculation of a more aggressive lift-off by the Fed at the March meeting.

Extra results from the US docket also saw weekly Claims bettering estimates after rising 223K in the week to February 5.

EUR/USD levels to watch

So far, spot is losing 0.12% at 1.1407 and faces the next up barrier at 1.1483 (2022 high Feb.4) followed by 1.1496 (200-week SMA) and finally 1.1664 (200-day SMA). On the other hand, a break below 1.1381 (weekly low Feb.10) would target 1.1323 (55-day SMA) en route to 1.1121 (2022 low Jan.28).

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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