EUR/USD falls deeper into the abyss with eyes on 0.9950

• EUR/USD bears keep hold of the baton and eye the 0.9950s.
• The US dollar is firmer on the hawkish sentiment surrounding the Fed. 

EUR/USD printed a fresh low in midday New York near 0.9973 and fell from a high of 1.0187 on the day following the US inflation data. At the time of writing, the price is trading near 1.4% down on the day with eyes on the 0.9950s. 

Consumer prices handily beat expectations according to the Labor Department report, underlying inflation picked up amid rising costs for rents and healthcare. ''The core index significantly exceeded expectations as well, on the back of unrelenting shelter price inflation, rising at a robust 0.6% MoM. The YoY change in headline CPI fell to a four-month low of 8.3%, but prices in the core index accelerated to a five-month high of 6.3% YoY,'' analysts at TD Securities explained.

''In our view, the August CPI report supports a continued aggressive effort by the Fed to restrict its inflation-adjusted policy stance.''

''We now expect the FOMC to raise the target rate by 75bp at its meeting next week, deliver another 75bp hike in November, and hike a further 50bp in December. We also now expect a higher terminal rate range of 4.25-4.50% by year-end.''

Meanwhile, however, Nomura analysts said on Tuesday that the Fed is likely to raise its short-term interest rate target by a full percentage point at its policy meeting next week, because of the emergence of upside inflation risks. The Federal Reserve will release its policy decision at the close of its two-day meeting next week, on Sept. 20-21.

Nomura predicted that the US central bank would raise its fed funds target rate by 50 basis points at both the November and December meetings. The fed funds target is currently 2.25%-2.50%, following the Fed's 75-basis-point hike in July.

EUR/USD technical analysis

As per the prior analysis, EUR/USD Price Analysis: Bears eye a run to 0.9950 on a break of trendline support, it stated that the weekly chart showed that the price was correcting into the neckline of the M-formation with scope for a deeper correction towards a 61.8% ratio:

Update:

The price has been rejected at the 61.8% ratio and there are now eyes on a move lower towards the 0.9950s as per the hourly chart: