Dollar Surges as Oil Prices Climb Ahead of US CPI Report

The EUR/USD pair has been consolidating in a tight range as investors await the release of the US CPI report. Despite a hawkish rate hike from the ECB, the pair edged lower for the second day, with technical analysis suggesting that the balance of risks remains tilted to the downside.

Key support levels for the EUR/USD come in between 1.1560 and 1.1580, while resistance is found around 1.1635-40 area where the resistance trend of the triangle pattern meets the 200-day average and recent highs.

The dollar has begun to find renewed support ahead of the CPI report, with rising oil prices and firmer inflation expectations contributing to its strength. The US Treasury's latest buyback programme suggests that investors do not expect Washington to suppress borrowing costs aggressively.