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EUR / USD hits one-week highs at 1.3845 after US CPI data.

  • Market sentiment is pessimistic and the major US stock indices are trading lower, limiting the price action of the EUR / USD.
  • US inflation figures were slightly lower than expected.
  • The US CPI, excluding food and energy, fell from 4.3% to 4%.
  • Questions arise about whether the Fed will stick with a bond phasing announcement in September.

The EUR/USD it rises modestly during the US session trading at 1.1822, up a modest 0.10% at the time of writing. Before US traders hit their desks early in the session, the common currency hit a fresh weekly high at 1.1845, although it trimmed some of its gains, hovering above Monday’s high.

Market sentiment is pessimistic, with commodity-linked currencies losing against the US dollar. Major US equity indices post losses between 0.17% and 0.72%.

Lower-than-expected US CPI figures caused a knee-jerk reaction

Inflation figures for the US were released on Tuesday. The monthly CPI was 0.3%, a figure lower than expected, while the CPI excluding food and energy contracted to 0.1% from the forecast 0.3%. In annual figures, the CPI remains unchanged at 5.3%, while the CPI excluding food and energy contracted 4.3% from the previous reading of 4%.

This data set proves Fed Chairman Jerome Powell’s correct thesis that inflation will be “transitory.” Furthermore, the EUR / USD pullback after hitting the weekly high could indicate that investors are still betting on the normalization of monetary policy in the US, which means that the Fed could announce a gradual reduction of bonds in the September FOMC meeting.

In the economic agenda of the Eurozone, data of less impact were published. Spain’s HICP stood at 3.3% year-on-year, in line with expectations, while the monthly base was 0.4% higher than the -0.7% predicted by economists.

During the European session, the president of the German Bundesbank, Jens Weidmann, commented on the digital euro and the possible disruption of the banking sector.

“A gradual approach could make sense given the risks involved, that means a digital euro with a specific set of features and the option to add more functionality later,” Weidmann told a conference.

On monetary policy, Weidmann did not comment.

Technical levels

EUR/USD

Panorama
Today’s Last Price 1.1822
Today’s Daily Change 0.0011
Today’s Daily Change% 0.09
Today’s Daily Opening 1.1811
Trends
SMA of 20 Daily 1.179
SMA of 50 Daily 1.1801
SMA of 100 Daily 1.1939
200 SMA Daily 1.1998
Levels
Daily Previous Maximum 1.1817
Daily Previous Minimum 1.177
Weekly Preview Maximum 1.1886
Weekly Prior Minimum 1.1802
Monthly Previous Maximum 1.19
Minimum Previous Monthly 1.1664
Daily Fibonacci 38.2% 1.1788
Daily Fibonacci 61.8% 1.1799
Daily Pivot Point S1 1.1782
Daily Pivot Point S2 1.1752
Daily Pivot Point S3 1.1735
Daily Pivot Point R1 1.1829
Daily Pivot Point R2 1.1846
Daily Pivot Point R3 1.1876

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