Fundamental: EUR/USD falls below 1.1700; US CPI next

The Euro closed Wednesday with losses against the US Dollar as investors were concerned about the and intensified trade war. Risk aversion on the plate and the Euro failed to hold 1.1700 levels. EUR/USD is now trading 0.10% positive on Thursday at 1.1680.

EUR/USD failed to extend its recovery above 1.1800 on July 9, when the pair got a rejection at 1.1790. Then the cross has logged two negative days in a row.

On the fundamental sphere, Germany and France will release its consumer price index for June in Europe. In America, the United States will publish its CPI for the same month. Investors will pay attention primarily to the US data as upbeat inflation would spur the Greenback for further highs and the EUR/USD to trade below the 1.1600 area.

The inflation in Germany is expected to rose 0.1% between May and June, while 2.1% in the last twelve months to June. In the United States, the critical data is the consumer price index excluding food and energy in the previous year. The market expects inflation of 2.3%. That would keep the Fed cautious to increase hikes again soon.

In forex terms, inflation differential would be the key in the EUR/USD development

EURUSD daily chart July 12

EURUSD daily chart July 12

To the upside, the EUR/USD needs to close above the 1.1715 to confirm some bullish risk. Above that, 1.1790 first, and 1.1840 would be the levels to watch.

The final frontier to confirm a trend change would be the 200-day moving average at 1.1980.

Technical conditions are neutral. While the pair is overbought, moving averages are pointing to the downside and momentum is suggesting a bearish risk.

To the downside, the 20-day moving average is the first support at 1.1650. Then the 1.1555 and finally the 1.1510.

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