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EURUSD: Bearish Delivery For CPI?

On Wednesday, the EURUSD pair remained steady around 1.0820, confined within a narrow range as the US Dollar continued its subdued trend. Federal Reserve Chairman Jerome Powell’s testimony before Congress did little to provide clear market direction, despite his return to a hawkish stance on monetary policy. Market participants remain uncertain, as US economic indicators—growth, employment, and inflation—are progressing steadily without necessitating Fed intervention. Focus now shifts to Thursday’s US Consumer Price Index (CPI) release, with annual inflation expected to rise by 3.1% in June and core CPI to remain unchanged at 3.4%. Additionally, speeches from Fed policymakers, including another testimony from Powell, will be closely watched for further insights.

EURUSD – D1 Timeframe

On the Daily timeframe chart as attached, we see the resistance trendline, as well as the SBR (Sweep-Break-Retest) pattern that seems to be the intent of the current price action. The supply zone is also pretty obvious, as it falls within the 76%-88% region of the Fibonacci retracement tool. To further confirm the bearish sentiment, let’s take a look at the lower timeframe price action.

EURUSD – H4 Timeframe

Viewing the lower timeframe (the 4-hour chart) of EURUSD, we see price currently trading within an ascending channel as it heads for the resistance trendline that cuts across the 88% Fibonacci retracement level. On this basis, an aggressive initial entry can be taken from the area of confluence of the 3 lines, while a more conservative approach would be to wait for the break below the trendline support of the ascending channel before taking a shot at it.

Analyst’s Expectations:

  • Direction: Bearish
  • Target: 1.07060
  • Invalidation: 1.09195

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