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EURUSD: U.S. Inflation Figures Setting Up a Bearish Pattern


The EURUSD was 0.50% lower in the U.S. trading session after U.S. inflation figures came in as expected at 1.4%. This is in contrast to the earlier release of German inflation at -0.2% and highlights the gap between the world’s two largest economies.

The Euro was under earlier pressure after the European Central Bank’s de Guinos noted a slowdown in some headline numbers and said they would influence the scale of future policy. He said: “High-frequency indicators point to the economy losing a certain momentum. Our policy reaction will be consistent with the evolution of the situation.”

De Guinos added that the December revision of ECB projections would determine the action required.

The greenback has been under pressure since the return of U.S. stimulus talks which looked like a $1.8 trillion deal was coming. The chances of that happening before the election have since faded and traders took some bets off the table.

Friday will see Eurozone core inflation released with an expectation of 0.2%, whilst later in the day, investors will get an update on U.S. retail sales and Michigan Consumer Sentiment. A bearish close could see further Euro losses until then. 

EURUSD Technical Outlook

The EURUSD closed above the 50-day moving average and after a weaker close, is setting up a bearish bar and a reversal pattern at the level. A close in this manner will set the U.S. dollar up for further gains towards the 1.1715 support level, with the September lows at 1.1625 being the key target. 

EURUSD Daily Chart