The Euro edged up 0.12% to approximately 1.1395 against the US Dollar in early European trading Tuesday as the greenback weakened ahead of crucial US inflation data. Markets are positioning cautiously before the June Consumer Price Index release scheduled for 12:30 GMT, which could significantly impact Federal Reserve policy expectations and currency valuations.
Despite the minor Tuesday gains, technical analysts are warning traders to prepare for further Euro weakness, with forecasts pointing toward a potential sell-off targeting the 1.1200 level. The current uptick appears to be a temporary correction rather than a trend reversal, as underlying pressure on the Euro remains substantial.
The CPI data release will be critical for EUR/USD direction, as stronger-than-expected inflation could bolster the Dollar and accelerate the Euro’s decline, while softer readings might provide temporary relief. Traders and brokers should monitor volatility spikes around the data release time.
FXnCO Insight
Position defensively on EUR/USD with tight stops before the 12:30 GMT CPI release, as volatility will likely surge and could trigger the forecast move toward 1.1200 support.
Source: FXStreet