Key Moments
- The US Dollar weakened after soft core inflation data, but later recovered as risk sentiment worsened.
- EURUSD failed to sustain gains near 1.17 and remains capped between 1.1615 support and a descending trendline.
- Traders are monitoring a possible US Supreme Court ruling on Trump’s tariffs, along with US Retail Sales and PPI data.
Fundamental Overview
US Dollar (USD)
The US Dollar initially fell after softer core inflation data. However, the move proved short-lived. As the session progressed, the greenback recovered and ended the day stronger.
Price action remained choppy and difficult to read. Still, renewed threats from President Trump toward Iran weighed on risk appetite. As a result, investors shifted defensively, which likely supported the Dollar’s rebound.
In rates markets, traders increased expectations for Federal Reserve easing by year-end. Total expected cuts rose to 54 basis points from 52 before the CPI release. Meanwhile, Fed officials continued to stress patience and a data-driven approach. Therefore, the near-term USD outlook remains neutral to slightly bearish.
Attention is now turning to a possible US Supreme Court decision on Trump’s tariffs. If the Court overturns the tariffs, markets may shift into a risk-on mode, which could pressure the Dollar. Conversely, if the tariffs remain in place, the market impact may be muted, as investors have largely priced them in.
Euro (EUR)
Meanwhile, the European Central Bank continues to strike a neutral tone. Policymakers emphasize a meeting-by-meeting and data-dependent approach. They have also stated that they will not respond to short-term inflation deviations.
Recent Eurozone data, including softer inflation readings, supports this stance. As a result, the ECB appears comfortable maintaining current policy settings for now.
EURUSD Technical Picture
Daily Timeframe
On the daily chart, EURUSD rallied toward the 1.17 resistance level following news of a DOJ subpoena. However, sellers quickly regained control. They erased the entire move and reasserted downside pressure.
The pair now trades within a clear range. Support sits at 1.1615, while a descending trendline caps the upside. As long as this structure holds, sellers are likely to remain active.
From a directional perspective, sellers may continue to lean against the trendline to target new lows. In contrast, buyers need a decisive break above that line to open a move toward the 1.18 area.
| Timeframe | Key Levels / Structures | Bias / Focus |
|---|---|---|
| Daily | Resistance near 1.17; support at 1.1615; descending trendline | Sellers leaning on trendline; buyers eyeing break toward 1.18 |
| 4 Hour | Major descending trendline and 1.1615 support | No new signals beyond the higher timeframe |
| 1 Hour | Minor descending trendline; average daily range levels | Short-term bearish bias; breakout levels in focus |
4-Hour Timeframe
The 4-hour chart offers limited additional insight. Key reference points remain the descending trendline and the 1.1615 support level. Therefore, traders may need to rely on lower timeframes for finer detail.
1-Hour Timeframe
On the 1-hour chart, a minor descending trendline is guiding short-term momentum. Sellers are likely to fade rallies into this line while managing risk just above it.
At the same time, buyers are watching for a clean break above the intraday trendline. Such a move could trigger a push toward the higher-timeframe trendline and potentially set up a broader breakout. The red lines mark the average daily range and help frame intraday volatility.
Upcoming Catalysts
Later today, traders will see US Retail Sales and PPI data. Although these releases cover older periods, they may still influence near-term positioning.
Looking ahead, US Jobless Claims data is due tomorrow. In addition, any US Supreme Court ruling on tariffs could significantly shift risk sentiment and USD direction.
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