EUR/USD Price Analysis: Trades inside neutral triangle ahead of US inflation report

• EUR/USD defends the immediate support of 1.0700 amid a risk-on mood.
• The ECB is expected to keep interest rates unchanged this month due to a weak economy and declining inflation.
• EUR/USD trades in a Symmetrical Triangle chart pattern, which indicates a volatility squeeze.

The EUR/USD pair managed to defend the round-level support of 1.0700 on Monday. The major currency pair broadly struggles for a decisive move as investors await the United States Consumer Price Index (CPI) data for August, which will be published on Wednesday at 12:30 GMT.

S&P500 opens on a bullish note amid a cheerful market mood as investors shift focus to the context that the Federal Reserve (Fed) would not raise interest rates in the remaining year. The US Dollar Index remains under pressure after a nominal improvement in China’s inflation.

On the Eurozone front, investors remain uncertain about the interest rate decision by the European Central Bank (ECB) for September monetary policy. Analysts at Commerzbank a majority of the ECB council members will probably vote for unchanged key rates due to the weak economy and the downward trend in the inflation rate.

EUR/USD trades in a Symmetrical Triangle chart pattern on an hourly scale, which indicates a volatility squeeze. The downward-sloping trendline is plotted from September 6 high at 1.0749 while the upward-sloping trendline is placed from September 7 low at 1.0686.

The shared currency pair remains closer to the 20-period Exponential Moving Average (EMA) at 1.0725 for the past three trading sessions, portraying a sideways performance.

Meanwhile, the Relative Strength Index (RSI) (14) oscillates in the 40.00-60.00, demonstrating a directionless performance ahead of the US inflation data.

Fresh upside bias would appear if the asset delivers a breakout of the neutral triangle September 8 high at 1.0744. A decisive break would send the major toward the horizontal resistances plotted from September 4 high at 1.0809 and September 1 high at 1.0882.

In an alternate scenario, a breakdown below September 7 low at 1.0686 would expose the asset to May low at 1.0635. A slippage below the latter would expose the asset to the round-level support of 1.0600.

EUR/USD hourly chart