Daily Analysis EURUSD - 14 June 2023

The softer US consumer inflation figures further support the market's anticipation of a pause in the Federal Reserve's tightening cycle. In May, the headline CPI experienced a modest rise, resulting in the annual rate slowing to its lowest level since March 2021. However, it is important to note that the year-on-year inflation rate of 4.0% remains twice the Fed's target, leaving room for a potential 25 basis points increase at the July FOMC meeting.

These factors support elevated US Treasury bond yields and lend some strength to the US dollar. On the other hand, influential European Central Bank (ECB) officials' recent hawkish comments suggest that the Eurozone still has a way to go before raising borrowing costs, despite a decline in the headline Eurozone CPI to 6.1% in May.

ECB President Christine Lagarde suggested the likelihood of additional interest rate hikes due to the absence of clear evidence that underlying inflation has peaked. This could provide support for the euro and the EUR/USD pair. Traders are cautious and await the outcomes of the upcoming FOMC decision and ECB meeting.

Looking at the technical aspect, the EUR/USD pair did not behave as expected following the release of the CPI data, and there was low volatility in the market due to the focus shifting toward the upcoming Fed meeting. It is important to highlight that the next significant resistance level can be found around the 200-day Moving Average (MA) on the 4-hour chart, aligning with the upper parallel of the descending long-term bearish trend. Additionally, the DXY (US Dollar Index) reached its 200MA and its lower parallel.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0945	1.0900	1.0850	1.0740	1.0700	1.0640