EUR/USD Under Pressure Ahead of US Inflation Report
The EUR/USD pair is experiencing some selling pressure as investors await the release of the latest US consumer inflation figures. The pair has been hovering around the 1.1600 mark, but a sustained break above the 23.6% Fibonacci retracement at 1.1627 would be needed to revive a more convincing bullish tone.
The US Consumer Price Index (CPI) report will provide crucial cues about the Federal Reserve's policy path, which in turn will drive the US Dollar and impact the EUR/USD pair. The recent US Producer Price Index (PPI) underscored still sticky inflationary pressures, prompting traders to lift bets for a September Fed rate hike.
The escalating US-Iran tensions are also contributing to the safe-haven Greenback's strength, while the European Central Bank's hawkish outlook has cushioned the downside for the EUR/USD pair. The ECB raised interest rates for the second time this year and warned that price pressures could last longer than anticipated, lifting bets on more policy tightening as soon as October.