When is the US CPI and how could it affect EUR/USD?

US December CPI Overview

Today's US economic docket highlights the release of the latest consumer inflation figures, due for release later during the early North-American session at 1330GMT. The headline CPI is anticipated to have contracted by 0.1% m/m in December, while the yearly rate is seen holding steady at 2.2%. Meanwhile, core CPI, which excludes volatile food and energy prices, is forecasted to edge higher by 0.2% m/m, similar pace as recorded in November, and remain at 2.2% y/y rate during the reported month.

Deviation impact on EUR/USD

Readers can find FX Street's proprietary deviation impact map of the event below and as observed, the reaction in case of a relative deviation of +0.98 to -1.25 in the core CPI print is likely to be in the range of 24-26 pips during the first 15-minutes and could stretch to 68-71 pips in the following 4-hours.

How could it affect EUR/USD?

Yohay Elam, FXStreet's own Analyst offers important technical levels to watch out for: "the pair is capped at 1.1542 where we see a dense cluster including the Bollinger Band one-day Upper, the Fibonacci 61.8% one-day, the Pivot Point one-month Resistance 1, the BB 1h-Upper, and the BB 15m-Upper. If it breaks higher, the next resistance line is around 1.1626 which is the convergence of the PP one-month R2, the Fibonacci 161.8% one-day, and the Simple Moving Average 200-one-day."

"Support awaits at 1.1487 where we see the previous day's low, last month's high, the SMA 100-one-day, the Fibonacci 61.8% one-week, and the SMA 100-1h. Further support is at 1.1434 which is the confluence of the PP one-day S2, the SMA 100-4h, and the Fibonacci 23.6% one-month," he added further.

Key Notes

   •  US CPI Preview: Headline and core inflation stable

   •  EUR/USD Forecast: Rising in the uptrend channel, fueled by the Fed

   •  EUR/USD keeps the trade above 1.1500 ahead of US CPI

About the US CPI

The Consumer Price Index released by the US Bureau of Labor Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchasing power of USD is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as positive (or bullish) for the USD, while a low reading is seen as negative (or Bearish).
 

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