Euro stalls below 100-day SMA as investors brace for US CPI

• EUR/USD stays below 100-day SMA as traders await CPI.
• Higher Oil prices revive inflation worries before US PPI release.
• Fed officials remain focused on inflation despite softer labor signals.

The single currency registers minimal losses against the Greenback on Tuesday as traders and market participants prepare for the release of the US Consumer Price Index (CPI) on Wednesday, which could set the path for the future of US monetary policy. The EUR/USD trades at 1.1541, staying below the 100-day Simple Moving Average (SMA) of 1.1567.

EUR/USD holds near 1.1540 as traders await US inflation data while Middle East tensions lift crude prices

Market participants continued to digest the recent news about the Middle East conflict. Tensions remain modestly high as the US fired a ship breaking the blockade in Iran, while the Houthis said that they attacked a Saudi vessel that carried military equipment in the Strait of Bab El-Mandeb.

Consequently, West Texas Intermediate (WTI), the US crude Oil benchmark, rises over 1.30% to $83.40 amid fears that a resolution of the conflict is further away than expected.

Aside from this, the focus shifts to US inflation figures on Wednesday. Forecasts suggest that headline inflation will dip from 3.5% to 3.4% YoY, with underlying figures projected to decelerate as well, from 2.6% to 2.5% in the twelve months to July.

On Thursday, the US Producer Price Index (PPI), along with the Consumer Price Index (CPI) data, could dictate the Federal Reserve’s forward path regarding interest rates.

Some Federal Reserve officials remained laser-focused on price stability. In a video with Wired, Chicago Fed President Goolsbee said the main economic issue is inflation, not industry or jobs. He noted that a healthy consumer keeps the economy stable and described the labour market as stable but not strong.

Earlier, the US schedule showed that the ADP Employment Change 4-week average indicated the creation of 8.25K jobs, while the previous print was downwardly revised by 4K to 11K. At the same time, US Existing Home Sales tumbled by 1.7% due to rising prices driven by the Middle East conflict.

In Europe, the docket was absent, yet on Wednesday, traders will eye Germany’s Harmonised Index of Consumer Prices (HICP) for July.

EUR/USD Price Forecast: Technical outlook

In the daily chart, EUR/USD trades around 1.1542, having pushed above the former descending trend-line barrier at 1.1517 and the top of the downward parallel channel near 1.1513, which now act as immediate underlying supports. Price also stands above the 50/100/200-day simple moving average cluster at roughly 1.1468, reinforcing a constructive near-term bias, while the 14-day Relative Strength Index near 59 suggests bullish momentum that is not yet overstretched.

On the downside, initial support is seen at the reclaimed trend-line break near 1.1517 and the channel top at 1.1513, followed by the multi-period simple moving average area around 1.1468 and then the channel floor at 1.1339. On the topside, the next notable resistance is the horizontal level at 1.1849, and a sustained break above this barrier would open the way for a more extended recovery phase in the pair.

(The technical analysis of this story was written with the help of an AI tool. Know more.)