Eurusd in consolidation amid lack of economic updates, focus shifts to upcoming US inflation data

EURUSD Analysis

Performance after Monday
Period	Pct	Chg	Momentum
Monday	0.24%	27 Pips
Week to-date	0.25%	28.5 Pips
June	0.67%	76 Pips

Upcoming key events (London Time)

Wed 01:30 PM USD CPI Inflation Rate (12-mth)

What happened lately

Currently, there are no significant economic updates from Europe or the United States, leaving the EURUSD currency pair in a state of consolidation. This means that the price action is narrowing, with neither bullish nor bearish trends taking precedent in the short term. The EURUSD on Monday saw a slight increase of 0.24%, ending at 1.14205. This moderate rise could be a result of technical market movements or minor investor sentiment shifts rather than being driven by fresh economic data.

Traders are likely focusing on upcoming economic news, particularly Wednesday’s announcement of the United States CPI Inflation Rate for the last 12 months, which is categorized as a high-impact event. This inflation data is crucial as it will potentially influence Federal Reserve monetary policy decisions. Consistently high inflation could prompt the Federal Reserve to continue or accelerate its rate hikes, further affecting the USD’s strength against the EUR. Conversely, a lower-than-expected inflation figure might alleviate pressure on the Fed, possibly leading to a softer USD relative to the euro.

The upcoming inflation figure is a key element for EURUSD traders. If inflation rates are higher than anticipated, signaling potential aggressive monetary tightening by the Federal Reserve, it might lead to a stronger USD and push the EURUSD lower. Conversely, a lower inflation print could weaken the USD, resulting in EURUSD gains as the market anticipates a less aggressive stance by the Fed. Hence, market participants are likely to be cautious and speculative ahead of the inflation data release, contributing to the pair’s current consolidation state. The outcome of the CPI report could initiate a more pronounced movement in the EURUSD, breaking the current range-bound trading pattern.

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What can we expect from EURUSD today?

EURUSD on Monday rose 0.24% to 1.14205. Price is above 9-Day EMA while Stochastic is falling.

Updated daily direction for EURUSD looks mixed as the pair is likely to consolidate above 1.13913 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.14394 or trades above daily pivot 1.14154. Break above could target R1 at 1.14445. While to the downside, we are looking at 1.13913 (S1) and daily low of 1.13862 as support levels. EURUSD need to break on either side to indicate a short-term bias. A break above 1.14394 may suggest continuation after recent positive movement.

For the week to-date, take note that EURUSD is mixed as compared to the prior week.

Key levels to watch out:

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