FundamentalOverview

The USD got a short termboost recently as Trump floated reciprocal tariffs. That came after a good US NFP report where the data was mixed at best butstill pointing to strength. The jump in average hourly earnings caught the eyebut that might have been distorted by the drop in average weekly hours.

We’ve also got another jumpin inflation expectations in the University of Michigan ConsumerSentiment surveyshowing that the tariffs news is the main culprit of the recent surge inexpectations.

The focus now switched tothe US CPI report due later today where Core inflation is expected to ticklower which would be a welcome news. A lower than expected print should see theUS Dollar losing ground across the board once again, while a hot reading mightboost the greenback for the rest of the week.

On the EUR side, the ECBrecently cut interest rates by 25 bps as expected and overallwe didn’t get anything new from the event as the central bank remains datadependent regarding the pace and magnitude of cuts. The latest PMIs showed an encouraging rebound in activity andthe news of a peace deal in the Russia-Ukraine war continue to gather momentum.That should be positive for the economy all else being equal.

EURUSD TechnicalAnalysis – Daily Timeframe

On the daily chart, we cansee that the EURUSD price action continues to be mostly rangebound. The priceis now trading between the 1.0344 support and the 1.0447 resistance. The buyers willlook for a break higher to extend the rally into the 1.06 handle, while thesellers will look for a break lower to target the 1.0222 level next.

EURUSD TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we cansee more clearly the recent price action and the trading between the keylevels. There’s not much we can add here as buyers and sellers will lean ontothose key levels or look for breakouts.

EURUSD TechnicalAnalysis – 1 hour Timeframe

On the 1 hour chart, we cansee that we have some consolidation just above the key 1.0344 level. From arisk management perspective, it would be much better to wait for the US CPIreport as any technical setup can be invalidated in a blink of an eye when thedata gets released. The red lines define the average daily range for today.

UpcomingCatalysts

Today we have the US CPI report. Tomorrow,we get the US PPI and the latest US Jobless Claims figures. On Friday, weconclude the week with the US Retail Sales data.