EUR/USD: Bearish pressure could ramp up with a drop below parity

EUR/USD has lots its traction following Tuesday's recovery attempt. AS FXStreet’s Eren Sengezer notes, parity comes back in play following correction.

Investors await June inflation data from the US

“Later in the session, the US Bureau of Labor Statistics will release the Consumer Price Index (CPI) data for June. Markets expect annual CPI to climb to a new multi-decade high of 8.8% from 8.6% in May. A ‘buy the rumor sell the fact’ action could be witnessed unless CPI figures surpass analysts' estimates. Weaker-than-forecast CPI prints, however, could trigger a risk rally in the near term and open the door for a rebound in EUR/USD.”

“In order to continue to push higher toward 1.0100 (psychological level, 20-pierodSMA) and 1.0150 (static level), the pair needs to clear 1.0050 (static level) and start using that level as support.”

“EUR/USD could face increasing bearish pressure and fall toward 0.9950 (static level from November 2002) and 0.9900 (psychological level) if buyers fail to defend 1.0000 (psychological level, multi-year lows set on July 12).”

See: US CPI Preview: Forecasts from 11 major banks, new peak but at headline