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- EUR/USD edges down to near 1.1610 as investors turn cautious at the start of the US CPI week.
- Market experts expect the US CPI data to significantly influence the Fed’s interest rate expectations.
- The US NFP data for August beats estimates by a wide margin.
The Euro (EUR) trades marginally lower at around 1.1610 against the US Dollar (USD) during the Asian trading session on Monday. The major currency pair edges down as the US Dollar ticks up, with investors turning cautious at the start of the United States (US) Consumer Price Index (CPI) week.
Investors will pay close attention to the US CPI data, which will be released on Friday, to get fresh cues regarding the Federal Reserve’s (Fed) monetary policy outlook.
Markets focus on final US inflation prints before Fed decision
Analysts at Deutsche Bank stress that “all eyes will be on the August US CPI print on Friday, preceded by the PPI on Thursday,” noting that these releases represent “the last set of inflation readings before the Fed’s next decision on September 16.” Their US economists expect a notable pickup in price pressures, with August’s headline CPI forecast “to come in at +0.38% MoM vs. +0.07% previously,” while they see underlying pressures remaining contained as core CPI is projected “to print +0.21% vs. +0.22%.”
Meanwhile, traders are expected to reassess Fed interest rate expectations soon as the US Nonfarm Payrolls (NFP) data for August has come in stronger-than-expected. The data showed on Friday that the economy created 162K fresh jobs, significantly higher than 56K estimates.
EUR/USD Technical Analysis
In the daily chart, EUR/USD trades at 1.1609, keeping a mildly bullish near-term tone as it holds above the 100-day Simple Moving Average (SMA) at 1.1563.
The Relative Strength Index (RSI) at roughly 54 stays in neutral territory, hinting that downside pressure persists but without strong momentum exhaustion signals on either side.
On the topside, key resistances are the August high at 1.1679, followed by the April high at 1.1849. Looking down, the 100-day SMA at 1.1563 is the first notable support that bulls need to hold to avoid getting exposed to further downside. Below the 100-day SMA, the psychological level of 1.1500 might act as key cushion for the pair.
