EUR/USD Price: Dollar Weakens Amidst US Inflation Data

The dollar remained near a two-month low on Tuesday as market participants eagerly awaited the release of the US inflation report. This data is expected to influence the Federal Reserve’s decision on the timing of rate hikes. Analysts will be closely watching for any indications of decreasing price pressures, which could impact the future interest rate outlook.

Federal Reserve officials have recently emphasized the need for additional rate hikes due to persistent inflation. However, they have also hinted that the central bank is nearing the end of its current tightening cycle.

Economists surveyed by Reuters forecast a 3.1% rise in headline inflation for June, which would be the lowest reading since March 2021. The core rate, expected to decline to 5% from 5.3%, still remains well above the Fed’s target of 2%.

Meanwhile, German inflation experienced an unexpected increase in June, breaking the trend of a steady decline seen earlier this year. The country’s consumer prices rose by 6.8% year-on-year, driven by factors such as base effects and temporary reductions in fares.

EUR/USD Technical Price Analysis: Uptrend Pauses for Retest

EUR/USD has been displaying a new bullish trend, reaching highs above the key level of 1.1001. The pair remains well above the 30-SMA, indicating a strong upward movement. The RSI also suggests bullish momentum in the overbought region.

Currently, the price is retesting the recently breached 1.1001 level, and if bulls regain control, the next resistance is likely to be encountered at 1.1040.

EUR/USD Price Analysis: Dollar Retreats from Highs After Fed Comments

The EUR/USD pair climbed to its highest level since May 8, surpassing the June high at 1.1011. However, it fell short of the next target at 1.10317, which is the high from February 2023. Traders had their sights set on the high for 2023 at 1.1095, but the pair failed to reach that level.

As a result, the price retraced, approaching a swing area between 1.09618 and 1.09759. This region is expected to provide support, but a break below it could disappoint buyers and lead to further downward probes.

Overall, the dollar’s recent weakness and the EUR/USD pair’s bullish trend suggest ongoing volatility and potential opportunities for traders.