Euro's 75-Day Sell Window Opens Amid Soaring US Inflation and Crude Oil Prices

The euro is approaching a critical period of seasonal weakness that could persist for approximately 75 calendar days. This optimal sell window has historically seen the euro decline, with a notable record in hypothetical testing: in 14 out of the past 15 years, the December euro futures have closed lower on November 9 than on August 27.

Traders should be aware that above-target U.S. inflation and rising crude oil prices could strengthen the dollar, adding fundamental support to the euro's seasonal weakness. The Consumer Price Index rose 3.4% during the 12 months ending in July, while core CPI increased 2.5%, with energy prices contributing significantly to the increase.

The Federal Open Market Committee has acknowledged that inflation remains elevated and that energy-related supply shocks are contributing to price increases. While a rate hike is not assured, any shift toward an earlier rate increase could support the U.S. dollar and create pressure on the euro.