EURUSD Traders Are Front-Running US CPI

·    May 14, 2024

·      May 14, 2024

·    May 14, 2024

EURUSD traders are positioning themselves for lower-than-forecast US Consumer Price Index (CPI) figures on Wednesday, but today’s hot Producer Price Index might have something to say about that.

Get the latest on the EURUSD as we head into Wednesday’s volatility, including key levels to watch, the current range trade, and a DXY update.

Let’s get started!

EURUSD is up today as traders position themselves for Wednesday’s US CPI numbers.

Given the euro’s rally since mid-April and today’s move up, traders are pricing in a lower US CPI print tomorrow.

Whether that will come true is yet to be seen, but Tuesday’s hot US Producer Price Index (PPI) numbers are not a great start for US dollar bears.

Granted, the lack of a reaction today is mostly due to last month’s numbers getting revised lower, but today’s hot PPI numbers don’t support the deflation narrative.

Technically, the EURUSD is surging above the 1.0800 handle today following the break above the March 8th trend line on Monday.

That’s now a must-hold support for euro bulls.

Any sustained break back below 1.0800 on the daily chart would indicate weakness and open up levels like 1.0730 and 1.0615.

Given the range that has developed for the EURUSD since the start of 2023, I’d feel more comfortable watching for shorts from the 1.0865 region.

That could coincide with the DXY testing its 2024 ascending channel.

Ultimately, a lot of what happens with the EURUSD and DXY in the next few days rests on Wednesday’s US CPI figures.

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