EUR/USD to slide below 1.06 on hot US inflation data

EUR/USD has failed to stage a meaningful rebound after having lost more than 100 pips on Thursday. The pair stays within a touching distance of 1.06 and a hot inflation report from the US could cause it to suffer additional losses ahead of the weekend, FXStreet’s Eren Sengezer reports.

Sellers could attack 1.06 on hot US inflation data

“The US Bureau of Labor Statistics will release the Consumer Price Index (CPI) data. On a yearly basis, the CPI is expected to stay unchanged at 8.3% in May. The Core CPI, which strips volatile food and energy prices, is forecast to decline to 5.9% from 6.2% in April.”

“Stronger-than-expected CPI readings could remind investors of the policy divergence with the Fed and trigger another leg lower in EUR/USD. On the other hand, a soft inflation report should cause investors to book their profits ahead of the weekend and help EUR/USD stage a rebound.”

“In case the pair falls below 1.06 and starts using it as resistance, it could target 1.0570 (Fibonacci 50% retracement of the latest uptrend) and 1.0520 (Fibonacci 61.8% retracement) next.”

“On the upside, 1.0650 (static level) aligns as first resistance ahead of 1.0680 (Fibonacci 23.6% retracement) and 1.07 (psychological level, 100-period SMA).” 

See – US CPI Preview: Forecasts from eight major banks, inflation peaked but faces challenges to moderate