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InstaForex

July 14, 2021

Strong US Inflation Causes EUR/USD to Plunge Again

 The US dollar strengthened in New York market session trading yesterday after published US inflation data posted a rising reading.


The published US consumer price index data for June rose to 0.9% compared to expectations of a decline to 0.5%. Core readings also increased by the same figure.


This situation has pushed expectations towards policy tightening by the Federal Reserve (Fed) earlier while a speech by Fed Chairman Jerome Powell will be awaited by investors.


As such, the US dollar has managed to show a clear direction after strengthening against most major currencies in the re -market.




On the price chart of the EUR/USD pair, the price has plummeted again denying the bullish forecast to break the 1.19000 level.



Instead the price has dropped to below the support level of 1.18000 with the latest low reaching 1.17700.


The slow price movement continued in the Asian session on Wednesday morning hovering below the 1.18000 level again.


With the pattern displayed, the price is likely to continue its decline towards the support level around 1.17200-1.17000 to record the latest 3-month low.


If the US dollar declines again, the price is seen to rise again above the 1.18000 level before heading back to the 1.19000 resistance zone.