EUR/USD soars as US CPI comes in below expectations

EUR/USD soars on the back of the sentiment for a Fed pivot following soft US Consumer Price Index (CPI).
US CPI came in below expectations and sent risk assets higher, US Dollar lower.

Ross J Burland FXStreet

EUR/USD has rallied heavily as the US Consumer Price Index has come in below expectations, leaving the door wide open for a pivot from the Federal Reserve that meets this week to decide on its monetary policy path. At the time of writing, EUR/USD is up on the day by over 1%, with the bulk of its gains coming in a knee-jerk reaction to the US inflation data as illustrated below.

The Euro reached a high of 1.0648 from 1.0555 off the bat vs. the US Dollar when US CPI printed as follows:

US CPI MoM Nov: 0.1% (est 0.3%, prev 0.4%).
US CPI Ex Food And Energy M/M Nov: 0.2% (est 0.3%, prev 0.3%).
US CPI YoY Nov: 7.1% (est 7.3%, prev 7.7%).
US CPI Ex Food And Energy Y/Y Nov: 6.0% (est 6.1%, prev 6.3%).

As a consequence of the data, the terminal Fed rate is now down to 4.86% vs 4.98% prior to the report which is weighing heavily on the US Dollar and US Treasury yields. DXY, an index that measures the US dollar vs. a basket of currencies fell to a low of 103.923 having been as high as 105.095 on the day as investors give a sigh of relief with the US benchmarks rallying - The Nasdaq jumped over 500 points.

EUR/USD technical analysis

(EUR/USD 30 min chart, above)

In the above daily chart, the market is on the front side of the bullish trend and there is every possibility that the price will continue higher into the in-the-money shorts towards 1.0800/50 in the days or weeks ahead.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

EUR/USD tests nine-day EMA support near 1.1850

EUR/USD inches lower during the Asian hours on Monday, trading around 1.1870 at the time of writing. The 14-day Relative Strength Index momentum indicator at 56 stays above the midline, confirming improving momentum. RSI has cooled from prior overbought readings but stabilizes above 50, suggesting dips could stay limited before buyers reassert control.

GBP/USD flat lines as traders await key UK macro data and FOMC minutes

The GBP/USD pair kicks off a new week on a subdued note and oscillates in a narrow range, just below mid-1.3600s, during the Asian session. Moreover, the mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold buyers hesitate amid holiday-thinned trading

Gold trades volatile, but within range, as US, China holidays-led thin trading exaggerates moves. The US Dollar extends range play into the US GDP week, with markets pricing at least two Fed rate cuts this year. Technically, Gold tests key support at $5,000; daily RSI still remains bullish.

Top Crypto Losers: Dogecoin, Zcash, Bonk – Meme and Privacy coins under pressure

Meme coins such as Dogecoin and Bonk, alongside the privacy coin Zcash (ZEC), are leading the broader market losses over the last 24 hours. DOGE, ZEC, and BONK ended their three consecutive days of recovery with a sudden decline on Sunday, as crucial resistance levels capped the gains. Technically, the altcoins show downside risk, starting the week under pressure.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.