Daily Analysis EURUSD - 13 July 2023

The EUR/USD pair is steadily gaining momentum as a result of the weak United States Consumer Price Index (CPI) data, suggesting that the Federal Reserve (Fed) only has one interest rate hike option remaining by the end of the year. With the US Dollar Index (DXY) experiencing a decline and the market sentiment being optimistic, the major currency pair has reached a level close to 1.1150.

In June, both the monthly headline and core inflation in the US showed a moderate pace of 0.2%, with a significant decrease in the annualized figures attributed to the decline in prices of used motor vehicles. Consequently, the US Dollar Index (DXY) has experienced a notable drop, approaching 101.40, and is expected to continue its downward trend.

Meanwhile, the European Central Bank (ECB) is anticipated to raise interest rates further in order to address persistent inflationary pressures. ECB President Christine Lagarde has already emphasized the need for additional interest rate adjustments.

Today PPI will be well watched to confirm that the rapid slowdown in inflation is broadly felt on consumers as for businesses.

The EUR/USD pair experienced a significant bullish surge of 1.20% in the last day, reaching a level of 1.1150. This increase occurred after breaking through the strong resistance level at 1.1080. Currently, the pair is testing the upper parallel of the current bullish channel line. It is likely that a correction will be necessary following such a substantial jump.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1200	1.1150	1.1100	1.1000	1.0920	1.0880