1.1100: Key support level for EUR/USD in countdown to US CPI data
The Euro (EUR) holds onto the previous day’s gains at around 1.1222 against the US Dollar (USD) during the Asian trading session on Tuesday.
At 11:00 AM, the Euro (EUR) maintains previous day's gains around 1.1222 against the US Dollar (USD) during the Asian trading session. The US Dollar experiences pressure as oil prices fall, which provides some relief from heightened global inflation expectations. The US Dollar Index (DXY) holds near 101.67, while WTI Oil price reaches its two-month low of $84.65.
Analysts at MUFG note that the US Dollar has weakened due to the sharp decline in oil prices, easing concerns over inflation. Investors are eagerly awaiting the US Consumer Price Index (CPI) data for October, which is expected to release at 13:30 GMT. The headline CPI is anticipated to be 3.9% YoY, higher than the previous 3.7%.
Core CPI – excluding volatile food and energy items – is also projected to be higher at 2.8% YoY. The Eurozone benefits from lower oil prices as it is a significant energy importer. The EUR/USD pair trades at 1.1223, hovering close to the 20-day exponential moving average (EMA) at 1.1212, indicating a neutral tone. Momentum is balanced, with the Relative Strength Index (RSI) at 48.97.
Support is found at Monday's low at 1.1138, with the major cushion at 1.1104, which, if broken, exposes the pair to 1.1000. Resistance on the upside is the November 4 high at 1.1273.
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