Bearish view
Bullish view
The EUR/USD exchange rate held steady on Thursday as traders reacted to the latest US consumer price index (CPI) data, rising geopolitical tensions, and the upcoming European Central Bank (ECB) interest rate decision. It was trading at 1.1547, a few points above this week’s low of 1.1500.
European Central Bank Decision and US Inflation
The EUR/USD pair held steady after the US published a mixed consumer inflation report. According to the Bureau of Labor Statistics (BLS), the headline Consumer Price Index jumped to 4.2%, the highest point since 2023. It has been in an uptrend in the past two consecutive months because of the impact of the US-Iran war.
Core inflation, on the other hand, rose 0.2% MoM, down from the previous 0.4%. This increase was better than the median estimate of 0.3%. It increased by 2.9% YoY from the previous month’s 2.8%.
The next key data to watch will be the Producer Price Index (PPI) report today, June 11. Economists expect the report to show that the headline PPI rose from 6.0% in April to 6.4% in May this year. If this is accurate, it will be a sign that it has moved further away from the Fed’s 2.0% target.
As a result, there are concerns that the Federal Reserve will hike interest rates at least once this year, a move that will irk President Donald Trump, who nominated Kevin Warsh to cut rates.
The EUR/USD pair will also react to the upcoming European Central Bank (ECB) interest rate decision. With European inflation moving further away from the 2% target, analysts believe that the bank will decide to hike interest rates by 0.25% to 2.40%.
EUR/USD Technical Analysis
The daily chart shows that the EUR/USD pair has bounced back in the past few days. It has retested the crucial resistance level at 1.1578, its lowest point in May this year. That is a sign that the pair has formed a break-and-retest pattern, a common bearish continuation sign.
The pair has remained below the 50-day moving average and the middle line of the Bollinger Bands indicator. There are signs that the recovery is losing momentum. As such, the most likely scenario is where it resumes the downtrend and retests the key support level at 1.1500. A move below that level will point to more downside towards 1.1410, its lowest point this year, which is 1.23% below the current level.
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Crispus Nyaga is a Technical Analyst at DailyForex with more than eight years of experience as a financial analyst, coach, and trader. He specializes in technical analysis of major currency pairs and cryptocurrencies, using chart patterns, trend structure, and key indicators to frame trading scenarios for Forex and digital asset markets. Crispus has worked with well-known brokers including ATFX, easyMarkets, and OctaFX, and his market commentary has been published widely on platforms such as Seeking Alpha, InvestingCube, Capital.com, and Invezz.
As seen on: SeekingAlpha, Macrostreet.com, Invezz.com, Forbes, Investing.com, Marketwatch, Crypto.news
