- The dollar soars after US inflation data.
- IPC falls less than expected and reinforces expectations of an aggressive Fed.
- EUR/USD loses almost 150 pips in minutes.
EUR/USD tumbled dramatically after the release of higher-than-expected US inflation figures for August. The pair fell from 1.0185 to the 1.0030 zone, reaching the lowest level since Friday.
The IPC did not register a slight expected drop in August, but instead rose 0.1%. The annual rate went from 8.5% to 8.3%, against the consensus that was for a reading of 8.1%. The data reinforced expectations of an aggressive Fed unleashing a sharp drop in stock markets and a dramatic rise in Treasury bond yields.
The dollar it fired and erased in a few minutes the losses of several sessions. DXY bounced from weekly lows below 108.00 and rose as high as 109.35. The 10-year bond yield jumped to 3.43%, the highest since June.
The EUR/USD remains under pressure trading daily lows near 1.0020. If the declines extend, possible supports are seen at 1.0010, followed by 0.9975. To the upside, immediate resistance looms at 1.0060. A firm return above would ease the downside pressure. The next resistance is at 1.0110.
Technical levels
Source: Fx Street
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