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Forex Market: EUR/USD off one-month high, heads for best monthly performance since April 2021 ahead of Euro Area CPI data

EUR/USD eased from a fresh one-month high on Tuesday, but was on track for its best monthly performance since April 2021 ahead of the key Euro Area CPI inflation data, scheduled to be released at 9:00 GMT.

A consensus of analyst estimates points to a 7.7% annual increase in Euro Area consumer prices in May, following a 7.4% surge in April, a record-high rate of increase. With CPI inflation being over 3 times above the European Central Bank’s inflation objective of 2%, pressure continues to mount on the ECB to raise interest rates.

Since the EU is moving closer to a decision to cut 90% of Russian oil imports by the end of 2022, red-hot inflation will probably continue to persist for a while.

“The risk is significantly to the upside for the eurozone aggregate data,” Adam Cole, chief currency strategist at RBC Capital Markets, was quoted as saying by Reuters.

“A substantial upward revision to the ECB’s near-term inflation trajectory is likely when the ECB’s next round of staff forecasts are published in June.”

Markets are now pricing in 115 basis points of ECB interest rate hikes during the last six months of this year.

As of 7:54 GMT on Tuesday EUR/USD was edging down 0.35% to trade at 1.0737. Yesterday the major Forex pair climbed as high as 1.0787, which has been its strongest level since April 25th (1.0815).

EUR/USD looked set to register its biggest monthly advance since April 2021, while being up 1.87% so far in May.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – 1.0762
R1 – 1.0800
R2 – 1.0824
R3 – 1.0862
R4 – 1.0899

S1 – 1.0738
S2 – 1.0701
S3 – 1.0676
S4 – 1.0652 is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

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