Euro Caught In The Range A US Dollar Sidelined Ahead Of CPI. Will EUR/USD Break Out?

By Daniel McCarthy of DailyFX

Tuesday, August 9, 2022 4:11 AM EDT

The Euro has continued to steady on Tuesday as the market awaits Wednesday’s inflation report in the US. EUR/USD has traded in a narrow range around 1.0190 so far today.

The Survey of Consumer Expectations conducted by the New York Fed on inflation revealed households see price increases waning. The 1-year outlook came in at 6.2% against 6.8% in the prior month. The 3-year outlook dropped to 3.2% in July from 3.6% previously.

Treasury yields dipped in the North American session and traded flat across the curve in Asia today. The US Dollar (DXY) index is unchanged at around 106.36.

Hong Kong’s Hang Seng Index (HSI) had a good day after speculation emerged that the government there is considering scrapping the double stamp duty that mainland Chinese buyers must pay.

The Chinese CSI 300 index was slightly positive as was Australia’s ASX 200. Firming commodity prices have helped to underpin the latter so far this week.

Crude oil is slightly softer in the Asian session after overnight gains with the WTI futures contract above US$ 90.50 bbl and the Brent contract near US$ 96.50.

The European Union has put forward a proposal to revive the 2015 US-Iran nuclear deal. It requires both countries to sign off on it before any oil can flow from the middle eastern producer.

Gold is steady near its one-month high of US$ 1,795 an ounce. The commodity-linked currencies of AUD, CAD, NOK, and NZD have mostly held yesterday’s gains. The Swiss Franc has also maintained the lofty levels seen on Monday.

It is another light data day today. Tomorrow’s US CPI and PPI remain the focus for now. The full economic calendar can be viewed here.

EUR/USD Technical Analysis

EUR/USD continues to trade in the 3-week range of 1.0100 – 1.0290. Those levels may provide support and resistance respectively.

There is a cluster of break points in the 1.0340 – 1.0360 area that may provide resistance. A descending trend line currently intersects in that zone as well.

The 20-year low at 0.9952 might provide support if tested.

(Click on image to enlarge)

EURUSD CHART