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

Haresh Menghani FXStreet

US CPI Overview

Tuesday's US economic docket highlights the release of the US consumer inflation figures for June, scheduled later during the early North American session at 12:30 GMT. Following a modest 0.1% drop in May, the headline CPI is expected to have jumped 0.5% MoM during the reported month and the yearly rate is projected to come in at 0.6% as compared to 0.1% previous. Meanwhile, the core CPI (excluding energy and food costs) is anticipated to rise by 0.1% in June and edge lower to 1.1% YoY rate from 1.2% in May.

How could it affect EUR/USD?

Hotter-than-expected inflation figures could provide a modest lift to the US dollar, which was now being supported by renewed concerns about escalating US-China tensions and surging COVID-19 cases. The data, however, is unlikely to be a game-changer for the EUR/USD pair as investors might refrain from placing any aggressive directional bets heading into the latest ECB monetary policy decision on Thursday. Nevertheless, the US macro data might still provide some impetus and assist traders to grab some short-term opportunities.

In the meantime, Pablo Piovano, Senior Editor and Analyst at FXStreet offered a brief technical outlook and important levels to trade the pair: EUR/USD tested and briefly surpassed the area of recent tops around 1.1370 on Monday, coming under some selling pressure soon afterwards. The rebound from the 1.1170 region (June 19/22) remains thus well in place and the next target is now at the 1.14 neighbourhood. Further north comes June’s peak near 1.1420 ahead of YTD highs in levels just shy f 1.1500 the figure (March 9). On the other hand, there is an interim support at the Fibo level at 1.1186 ahead of the more relevant 1.1170/65 band. A breach of this support band should expose a deeper pullback to, initially, the 55-day SMA at 1.1116 ahead of the always-critical 200-day SMA, today at 1.1050.

Key Notes

• US Consumer Price Index June Preview: Prices slowly return to normal

• EUR/USD Price Forecast: Room for a move to 1.14 and beyond

• EUR/USD: Break of 1.1369/71 to open the door toward March high at 1.1495 – Credit Suisse

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).

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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