FundamentalOverview

The USD is weaker acrossthe board following the soft US PPI report yesterday. The market pricing is nowshowing a total of 31 bps of easing by year end compared to 24 bps before thePPI. The focus remains on the US CPI report today.

A hot report will likelycause some trouble in the markets with the stock market looking as the mostvulnerable right now.The best outcome would be a softreport given the overstretched moves in the markets caused by the repricing inrate cuts expectations.

That would likely reversemost of the recent trends and trigger a correction in Treasury yields andtherefore in the US Dollar.

On the EUR side, the latestEurozone CPI came in line with forecastsalthough the Core measure remained pretty sticky around 2.7%. As a reminder, theECB cut thepolicy rate by 25bps at the last decision bringing it to 3.00%.

The central bank removedthe passage saying that “it will keep policy rates sufficiently restrictive foras long as necessary” implying that upside inflation risks have faded. Themarket sees a 98% probability of a rate cut at the upcoming meeting and a totalof 88 bps of easing by year end.

EURUSD TechnicalAnalysis – Daily Timeframe

On the daily chart, we cansee that EURUSD is off from the lows as the tariffs news and the US PPIweakened the US Dollar across the board. From a risk management perspective,the sellers will have a better risk to reward setup around the major trendline to position for further downside.The buyers, on the other hand, will want to see the price breaking higher toincrease the bullish bets into new highs.

EURUSD TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we cansee that we have an important resistance zone around the 1.0335 level wherethe price got rejected from several times in the past weeks. That’s where wecan expect the sellers to step in with a defined risk above the level toposition for a drop back into the lows. The buyers, on the other hand, willwant to see the price breaking higher to increase the bullish bets into themajor trendline targeting a break above it.

EURUSD TechnicalAnalysis – 1 hour Timeframe

On the 1 hour chart, we cansee that we have a minor upward trendline defining the current bullish momentumon this timeframe. The buyers will likely keep on leaning on it to position forfurther upside, while the sellers will look for a break lower to target newlows.

The red lines define the average daily range for today although the price caneasily extend beyond those levels given that we have the US CPI report aheadand it’s a key event.

UpcomingCatalysts

Today, we have the US CPI report, while tomorrow we get the latest US JoblessClaims figures.