- 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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