US CPI Overview
Wednesday's US economic docket highlights the release of the US consumer inflation figures for July, scheduled later during the early North American session at 12:30 GMT. The headline CPI is projected to rise by 0.3% during the reported month as compared to the 0.6% increase recorded in June. Meanwhile, the yearly rate is anticipated to come in at 0.8% as against 0.6% previous. The core CPI (excluding energy and food costs) is anticipated to have risen 0.2% MoM and 1.1% YoY.
How could it affect EUR/USD?
Against the backdrop of reviving hopes of a US economic recovery, a stronger-than-expected reading might be enough to provide a modest lift to the US dollar. That said, the reaction is likely to remain limited amid uncertainty over the next round of the US fiscal stimulus measures.
In the meantime, Yohay Elam, FXStreet's own Analyst offered important levels to trade the pair: "Critical support awaits at the double-bottom of 1.17, recorded in recent weeks. Beyond that line, 1.1625 was a stepping stone on the way up, 1.1540 was a swing low and 1.1510 provided support in mid-July. Resistance is at 1.1750, which provided support last week, followed by 1.1805, which capped EUR/USD on Tuesday. Next, 1.1850 and 1.1915 await the currency pair."
Key Notes
• US CPI July Preview: Inflation loses its cachet
• EUR/USD Forecast: Breaking double-bottom looks near as bulls yield ground, inflation eyed
• EUR/USD Price Analysis: Immediately to the upside comes in 1.1916
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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