The USD struggled to recover some of the ground lost post-ECB’s announcement, succeeding partially. The US reported the January Consumer Price Index (CPI), which soared to 7.5% YoY, its highest since February 1982.
US inflation sent investors into pricing in a 50 bps rate hike in March.The American dollar struggled to recover some of the ground lost post-ECB’s announcement, succeeding partially. Soaring inflation and central banks’ responses to it have been the main market catalyst since mid-2021, and that was again what moved the market this week.
The upcoming week will start with the EU publishing a revision of its Q4 Gross Domestic Product, expected to be confirmed at 0.3% QoQ. Germany will publish the February ZEW Survey on Economic Sentiment, while the US will unveil January Retail Sales, seen up 1.7% MoM. Finally, the FOMC will publish the Minutes of the latest meeting.The weekly chart for the EUR/USD pair shows that further long-term gains are in doubt.
The market is still looking for a trend after digesting the latest central bank updates. The pair can turn bullish once above the 1.1500 figure and extend its gains towards the 1.1620 price zone. On the other hand, a slide below 1.1320 should open the door for a steeper decline towards the 1.1260 level first, followed later by the year low at 1.1120. hints at a bearish continuation in EUR/USD.
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