EUR/USD slips to 0.9630 on US CPI

The EUR/USD falls to 0.9630 after losing momentum. In September, US CPI grew more than was anticipated. The likelihood of a 75 basis point rate increase by the Fed increases.

The euro soon left the zone of daily highs against the dollar, causing EUR/USD to Thursday plunge to new 2-week lows at 0.9630.

After the crucial US inflation data came positively in September, with the headline CPI climbing 8.2% YoY and 0.4% MoM, the selling pressure on the EUR/USD currency pair intensified. The Core CPI continued its upward trajectory, climbing 6.6% compared to the same month in 2021 and 0.6% from the previous month.

Additional data releases revealed that the average weekly Claims increased by 228K on October 8, which was also more than anticipated.

The rise in US yields throughout the curve gave the dollar more support. The now-increasing likelihood that the Fed would raise interest rates by a quarter point at its meeting on November 2 also contributed to the decrease in spot.


What to watch for in the EUR

Given the current offered price for the EUR/USD and the intense emotion around the dollar, a further correction is possible shortly.

Price movement around the euro is anticipated to closely track dollar trends, geopolitical tensions, and the Fed-ECB divergence in the interim. The latter is anticipated to continue to grow in light of recent findings from critical economic indicators, given the continued strength of the US economy.

Additionally, the growing fears of a regional recession – which seem to be supported by declining mood indicators and an impending downturn in certain fundamentals – contribute to the pessimistic outlook for the euro.

This week’s significant events in the eurozone include EMU Balance of Trade – Germany Final Inflation Rate (Thursday) (Friday).

The continuation of the ECB’s rate hike cycle vs. rising recession concerns are important topics simmering in the background. Impact of the conflict in Ukraine and the ongoing energy shortage on the prognosis for inflation and growth in the area.


EUR/USD Levels to Monitor

The pair is now down 0.45% at 0.9659, and a decline below that level would target 0.9535 (2022 low September 28) before reaching 0.9411 (monthly low October 13). (weekly low June 17, 2002). In contrast, the subsequent upward barrier appears at 0.9999 (weekly high October 4), 1.0050 (weekly high September 20), and 1.0197. (monthly high September 12).

and 1.0197. (monthly high September 12).