Pound and Euro Decline Following US Inflation Data Release

FXOpen

Yesterday’s Consumer Price Index (CPI) data showed that inflation in the US continues to slow. The rate fell to 2.4%, down from last month's 2.5%, but slightly above the experts' forecast of 2.3%. These figures supported the dollar, as slowing inflation and a strong labour market may lead the Federal Reserve to refrain from aggressive interest rate cuts in the coming months.

EUR/USD

The euro tested key support at the 1.0900 level yesterday. By the end of the day, EUR/USD buyers managed to correct the price to 1.0940. Price action within the 1.1000-1.0900 range will be crucial for the pair’s future direction. A break below 1.0900 could extend the downtrend towards 1.0800-1.0700, while a resumption of the uptrend is possible with a decisive move above the psychological level of 1.1000.

Key events affecting the pair’s price action:

  • Today at 09:00 (GMT+3), the release of Germany’s Consumer Price Index (CPI).
  • Today at 14:00 (GMT+3), the release of Germany’s Current Account Balance (non-seasonally adjusted).
  • Today at 15:30 (GMT+3), the release of the US Producer Price Index (PPI).

According to the technical analysis of the EUR/USD pair, the price could decline towards 1.0800, as a "double top" pattern is forming on the daily time frame.

GBP/USD

Sellers of GBP/USD nearly tested key support at 1.3000 yesterday. Technical analysis indicates the potential for continued downward movement, as a bearish "tower" formation has developed on the daily time frame. However, attention should be paid to price action in the 1.3040-1.3000 range, as these levels have acted as both support and resistance. A correction to 1.3170-1.3100 is possible here.

Key events that may impact the pair’s movement:

  • Today at 09:00 (GMT+3), the release of the UK’s GDP data for August.
  • Today at 09:00 (GMT+3), the release of the UK’s industrial production data for September.
  • Today at 15:00 (GMT+3), the release of the UK’s monthly GDP tracker from NI.

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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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