Down to 1.17 area!
USD CPI had no surprise. US inflation hit 5.4% YoY in June, way above the market estimate at 4.9%. Core CPI also accelerated to 4.5%, above 4% estimated. The dollar is rising across the board.
We were waiting to see that US CPI will be steady this month or the raise will confirm that inflation will not be short-lived; today, published data confirmed that price gain could continue and ensure the annual price gains are not a temporary phenomenon.
In the past six months, the US inflation rate has tripled from 1.7% to the current 5.4%. Today's data will put the hawkish fans in a stronger position.
As higher inflation increases the possibility of FED policy change to the Hawkish tone or at least will decrease its Dovish tone, in response to the news, the USD index now trading 0.5% higher at 92.70, and it send the EURUSD down more than 0.50% under 1.1800 area. Technically, EURUSD breached its key level at 1.1820 and then entered to 1.17 room. Currently, as we are in the OS area with RSI at 20 and out of the Bollinger band's range, a short-lived correction can be seen. However, the trend is expected to continue, and lower numbers are expected for the next day.
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