EUR/USD has plunged back into its previous triangle range, driven by a wave of safe-haven flows into the US Dollar. The escalation between the US, Israel, and Iran over the weekend, which led to the de facto closure of the Strait of Hormuz, has sparked a global energy shock. Because Europe is highly dependent on energy imports, this crisis is hitting the Euro harder.
Today’s Eurozone CPI release adds a wild card to the mix. With French inflation surprisingly hot last week, a similar European print could trigger short-term relief, while a cool print will align perfectly with the bearish geopolitical environment.
Key topics covered
- Safehaven dollar: The escalation in the Middle East and the disruption of oil transit through the Strait of Hormuz are damaging European growth prospects, while reinforcing the US Dollar's dominance.
- Triangle false breakout: The recent peak above the triangle appears to have been the final wave of an exhausted uptrend. Prices have now fallen below the 61.8% Fibonacci at 1.1768 and the 78.6% level at 1.1682.
- RSI momentum: The daily RSI has rejected the 50 centerline and is sliding toward 35, confirming that bears are firmly in control of the near-term trend, with more room towards 30.
EUR/USD scenarios & CPI impact
- Bearish (Geo/Macro alignment): If today's Eurozone CPI comes in at or below expectations (1.7% headline, 2.2% core), the weakness aligns perfectly with the technical breakdown and the ongoing situation in the Middle East. The pair is highly likely to continue its slide toward the 1.1572 low (Wave E of the triangle). A break below this support opens the door to deeper medium-term declines toward 1.1472 and 1.1395.
- Bullish (Short-term relief): If the CPI prints surprisingly hot (similar to the French data), we could see a short-covering bounce. Prices would need to reclaim 1.1682, with immediate targets at the top trendline of the triangle and the 1.1768 (61.8% Fib) resistance. However, unless the pair can break back above 1.1829 (50% Fib) or we see an unexpected geopolitical truce, any upside is likely to be short-lived.
Are you selling the Euro on the energy shock or speculating on a hot inflation bounce? Share your views in the comments.
This content is not directed to residents of the EU or UK. Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice.
ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
Today’s Eurozone CPI release adds a wild card to the mix. With French inflation surprisingly hot last week, a similar European print could trigger short-term relief, while a cool print will align perfectly with the bearish geopolitical environment.
Key topics covered
- Safehaven dollar: The escalation in the Middle East and the disruption of oil transit through the Strait of Hormuz are damaging European growth prospects, while reinforcing the US Dollar's dominance.
- Triangle false breakout: The recent peak above the triangle appears to have been the final wave of an exhausted uptrend. Prices have now fallen below the 61.8% Fibonacci at 1.1768 and the 78.6% level at 1.1682.
- RSI momentum: The daily RSI has rejected the 50 centerline and is sliding toward 35, confirming that bears are firmly in control of the near-term trend, with more room towards 30.
EUR/USD scenarios & CPI impact
- Bearish (Geo/Macro alignment): If today's Eurozone CPI comes in at or below expectations (1.7% headline, 2.2% core), the weakness aligns perfectly with the technical breakdown and the ongoing situation in the Middle East. The pair is highly likely to continue its slide toward the 1.1572 low (Wave E of the triangle). A break below this support opens the door to deeper medium-term declines toward 1.1472 and 1.1395.
- Bullish (Short-term relief): If the CPI prints surprisingly hot (similar to the French data), we could see a short-covering bounce. Prices would need to reclaim 1.1682, with immediate targets at the top trendline of the triangle and the 1.1768 (61.8% Fib) resistance. However, unless the pair can break back above 1.1829 (50% Fib) or we see an unexpected geopolitical truce, any upside is likely to be short-lived.
Are you selling the Euro on the energy shock or speculating on a hot inflation bounce? Share your views in the comments.
This content is not directed to residents of the EU or UK. Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice.
ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
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คำจำกัดสิทธิ์ความรับผิดชอบ
ข้อมูลและบทความไม่ได้มีวัตถุประสงค์เพื่อก่อให้เกิดกิจกรรมทางการเงิน, การลงทุน, การซื้อขาย, ข้อเสนอแนะ หรือคำแนะนำประเภทอื่น ๆ ที่ให้หรือรับรองโดย TradingView อ่านเพิ่มเติมใน ข้อกำหนดการใช้งาน