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James Hyerczyk
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EUR/USD

The Euro is trading flat against the U.S. Dollar, hovering near a two-month high on Tuesday, with the focus on the U.S. inflation report, due to be released at 12:30 GMT.

The data is being watched closely ahead of next week’s U.S. Federal Reserve meeting on September 21-22. The consumer inflation report (CPI) is expected to show consumer prices rose 0.4% in August, down from 0.5% in July, according to a Reuters poll.

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At 09:50 GMT, the EUR/USD is trading 1.1810, down 0.0001 or -0.01%.

The year-on-year rise in consumer inflation is also expected to fall to 5.3% from 5.4% in July, suggesting further evidence that inflation may be starting to cool.

A higher-than-expected CPI reading may push U.S. Treasury yields moderately higher. This could pressure the Euro because higher yields tend to make the U.S. Dollar a more attractive asset.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through 1.1909 will signal a resumption of the uptrend. A move through 1.1664 will change the main trend to down.

The minor trend is down. This is controlling the momentum. A trade through 1.1770 will indicate the selling pressure is getting stronger. A move through 1.1851 will change the minor trend to up.

The short-term range is 1.1664 to 1.1909. Its retracement zone at 1.1787 to 1.1758 is support. This zone stopped the selling at 1.1770 on Monday.

On the upside, the resistance is the main retracement zone at 1.1820 to 1.1856. Inside this zone is a minor 50% level at 1.1840.

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Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Tuesday is likely to be determined by trader reaction to the 50% level at 1.1820.

Bearish Scenario

A sustained move under 1.1820 will indicate the presence of sellers. The first downside target is the short-term 50% level at 1.1787, followed by a minor bottom at 1.1770 and the short-term Fibonacci level at 1.1758.

The Fib level at 1.1758 is a potential trigger point for an acceleration to the downside with the next major target coming in at 1.1664.

Bullish Scenario

A sustained move over 1.1820 will signal the presence of buyers. If this creates enough upside momentum then look for the market to surge into 1.1840, followed by 1.1851 and 1.1856.

The main Fibonacci level at 1.1856 is a potential trigger point for an upside breakout with the main top at 1.1909 the next likely target.

For a look at all of today’s economic events, check out our economic calendar.
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