US Inflation Report in Focus as EUR/USD and GBP/USD Hold Steady

The EUR/USD and GBP/USD pairs are holding their ground against the US dollar after recent gains, but market participants are cautious ahead of today's release of the July US inflation report. This report could alter expectations for the Federal Reserve's future policy, with weaker-than-expected figures potentially strengthening expectations of monetary policy easing by the Fed.

The euro and pound have been in a relatively stable range of late, with EUR/USD trading between 1.1500-1.1580. Technical analysis suggests the possibility of another test of the lower boundary, as a Dark Cloud Cover pattern has formed on the daily timeframe.

However, if inflation comes in above forecasts or proves more persistent, the US currency could receive fresh support, increasing the likelihood of EUR/USD and GBP/USD returning to their nearest support levels. The main driver for these pairs today will be the US inflation data, with key events including the release of the Consumer Price Index (CPI) at 15:30 GMT+3.

The CPI is forecast to slow to 3.4% from 3.5%, while monthly prices are expected to rise by 0.1% after falling 0.4% a month earlier. Core CPI is forecast at 2.5% year-on-year and 0.2% month-on-month.