EUR/USD trades marginally lower around 1.1610 during Monday’s Asian session as the U.S. dollar ticks higher and investors turn cautious at the start of a key U.S. inflation week. The pair is holding around 1.1609, with market participants awaiting fresh inflation data for clues about the Federal Reserve’s monetary policy outlook.
The focus is firmly on the U.S. Consumer Price Index (CPI), scheduled for Friday. The report will arrive shortly before the Fed’s September 16 policy decision and could influence expectations for the central bank’s next interest-rate move.
US CPI and jobs data drive Fed bets
The U.S. inflation calendar is particularly important this week, with the Producer Price Index (PPI) due Thursday and CPI due Friday. Analysts at Deutsche Bank describe the two reports as the final major inflation readings before the Fed’s next decision.
Deutsche Bank expects a notable acceleration in headline inflation, while underlying price pressures are forecast to remain relatively contained.
- Headline CPI: +0.38% month-on-month forecast, versus +0.07% previously
- Core CPI: +0.21% month-on-month forecast, versus +0.22% previously
- U.S. PPI: Due Thursday
- U.S. CPI: Due Friday
- Fed decision: September 16
The stronger U.S. labor-market data have also increased the importance of this week’s inflation releases. August Nonfarm Payrolls rose by 162,000, significantly above the 56,000 market estimate. The stronger-than-expected jobs report could encourage traders to reassess expectations for Federal Reserve policy.
A hotter CPI reading could support the U.S. dollar by reinforcing expectations for tighter monetary policy, potentially weighing on EUR/USD. Softer inflation, however, could reduce rate concerns and give the euro room to recover.
1.1563 SMA remains key support
The technical outlook for EUR/USD remains closely tied to the 100-day Simple Moving Average at 1.1563. With the pair trading around 1.1609, it remains above this important technical level in the original setup, although current market data continue to show EUR/USD close to the 1.1610 area.
The Relative Strength Index (RSI) is around 54, indicating neutral momentum. This suggests that neither buyers nor sellers have established strong control, leaving upcoming U.S. economic data as a potential catalyst.
Key technical levels include:
- Immediate resistance: 1.1679, the August high
- Major resistance: 1.1849, the April high
- 100-day SMA: 1.1563
- Psychological support: 1.1500
- RSI: Around 54
A sustained move above 1.1679 could strengthen the bullish outlook and expose the 1.1849 April high. On the downside, a decisive break below 1.1563 would weaken the technical structure and potentially bring 1.1500 into focus.
Conclusion
EUR/USD starts the U.S. CPI week near a critical technical area, with the 100-day SMA at 1.1563 remaining an important level for the pair’s outlook. Stronger-than-expected U.S. payrolls have increased attention on the Federal Reserve, while Thursday’s PPI and Friday’s CPI could determine whether dollar strength extends. A break above 1.1679 would improve the bullish case, while a move below 1.1563 could expose EUR/USD to deeper downside toward 1.1500.
Sources & Methodology
Primary-source standard: Market-moving facts should link to original data releases, regulator notices, company filings or official project announcements whenever available. Secondary reporting is used for additional context, not as a substitute for original evidence.
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