When will the Consumer Price Index report be released and how could it affect EUR/USD?

The Consumer Price Index (CPI) inflation data for July will be published at 12:30 GMT on August 10. The US Dollar started the week on a bullish note. The US Dollar Index, which gauges the USD’s valuation against a basket of six major currencies, is up nearly 1% in August after posting losses in June and July. According to the CME Group FedWatch Tool, markets are currently pricing in a more than 20% probability of the Fed opting for one more rate increase in 2023. The market positioning suggests that the USD faces significant upside risk in case inflation readings come in hotter than expected. On the flip side, the USD could weaken on a downside surprise to the CPI prints but the currency’s losses could remain limited, at least in the near term, with markets already forecasting a more than 70% probability of a no change in the Fed interest rate.

Eren Sengezer, European Session Lead Analyst at FXStreet, offers a brief technical outlook for EUR/USD and explains: 

“Heading into the US inflation data, the near-term technical outlook for EUR/USD fails to provide a directional clue. The pair has been fluctuating between the 20-day and the 50-day Simple Moving Averages (SMA) since late July and the Relative Strength Index (RSI) indicator on the daily chart has been moving sideways at around 50 during that period.”

Eren also outlines key technical levels to watch for:

“On the upside, 1.1060 (20-day SMA) aligns as the first resistance. A daily close above that level could open the door for an extended uptrend toward 1.1150 (static level, July 28 high) and 1.1250 (end-point of the latest uptrend).”

“Looking south, critical support is located at 1.0920 (100-day SMA). If the pair drops below that level and starts using it as resistance on a hot inflation report, additional losses toward 1.0850 (static level) and 1.0760 (200-day SMA) could be witnessed.