EUR – The euro is consolidating in a narrow range, awaiting guidance from the U.S. CPI

The U.S. Bureau of Labor Statistics will release its July Consumer Price Index (CPI) report on Wednesday. The market consensus is for a 0.1% month-on-month increase in overall CPI and a 0.2% increase in core CPI. Year-on-year, overall CPI is expected to be 3.4%, and core CPI is expected to be 2.5%, both down 0.1 percentage points from June. If the July CPI remains moderate, this could give Federal Open Market Committee (FOMC) policymakers more time to observe before deciding whether to adjust interest rates. After the release of the non-farm payroll data last Friday, market expectations for a September rate hike briefly fell to around 40% to 44%, but with the rebound in international oil prices, the probability of a rate hike has risen again to around 50%.

The euro is hovering at high levels against the dollar, clearly constrained by the 100-day moving average. The current challenge is the year-to-date downtrend line, currently at 1.1550. The exchange rate is currently consolidating in this area, requiring further observation for confirmation. The 100-day moving average is also nearby at 1.1570. A decisive break above this level could lead to a larger upward move for the euro, with resistance at 1.1620, and key levels at 1.18 and even 1.20. Immediate support is seen at 1.15, which is also last week's low, with the next level expected at 1.1430, followed by 1.1320-50. A clear break below these levels could lead to another downward move for the euro, with support at 1.1260, and the next level at 1.12.

Forecast range
Resistance 1.1550/70* - 1.1620 - 1.1800 – 1.2000*
Support 1.1500 - 1.1430 - 1.1320/50* – 1.1260 - 1.1200

News Brief
10/8
Eurozone Sentix August Investor Confidence Index: 0.9

Key Focus:
Wednesday
Germany July CPI‧HICP (14:00)

Thursday
Eurozone June Industrial Production (17:00)

Friday
Eurozone Q2 Employment Change (18:00)
Eurozone Q2 GDP (18:00)

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