In the early trading session in Europe on Tuesday, the euro (EUR) gained about 0.12% against the US dollar (USD), reaching approximately 1.1395. Several major currency pairs increased as the US dollar underwent a correction, anticipating the release of the June US Consumer Price Index (CPI) data at 12:30 PM Japan time.
As of now, the US Dollar Index (DXY), which tracks the dollar’s value against six major currencies, is down by 0.1% at around 101.17. Previously, DXY had risen by 0.3% to about 101.33.
The dollar had strengthened following US President Donald Trump’s announcement regarding a blockade of Iranian ports, stating that the US is entitled to transit fees from vessels navigating through the Strait of Hormuz. This insistence on tolls from Washington has led to noticeable increases in oil prices and US Treasury yields.
Regarding the US CPI report, predictions indicate that headline inflation is expected to drop to 3.8% year-on-year, down from 4.2% a year earlier, while core inflation is anticipated to reflect a steady growth of 2.9%.
Investors are also keenly awaiting remarks from Federal Reserve Chairman Kevin Warsh during his initial testimony before the House Financial Services Committee later today.
EUR/USD technical analysis
bias: Currently, EUR/USD is trading around 1.1395. Yet, the short-term outlook for this pair appears bearish, as the price is below the 20-period exponential moving average (EMA) of 1.1438, suggesting a breakdown of the bearish flag pattern.
momentum: The Relative Strength Index (RSI) is positioned below the neutral mark of 50 at 39.7, indicating ongoing downward pressure rather than an entirely oversold condition.
resistance: To the upside, the first resistance level is near the previous channel bottom around 1.1411, followed by the 20-period EMA at 1.1438, which strengthens the bearish upper boundary. Beyond that, there’s the channel top at approximately 1.1509 and a more distant trendline barrier at 1.1618.
support: On the downside, if this major currency pair falls below the June low of 1.1325, it may decline towards 1.1300 and the low noted on May 29, 2025, at 1.1210.
(The technical analysis in this report was generated with the assistance of AI tools.)
economic indicators
Consumer price index (year-on-year change)
Inflationary or deflationary trends are evaluated by periodically measuring the prices of a representative selection of goods and services, expressed as the Consumer Price Index (CPI). The government compiles and releases this data monthly. Comparing the current month’s data with the same month from the previous year, the CPI serves as a crucial indicator for assessing inflation and shifts in purchasing behavior. Generally, high CPI readings tend to be favorable for the US dollar (USD), whereas low readings may have the opposite effect.
