CPI Report from US
CPI report from US will be the most important moment for EUR this week. If we get high inflation report we will hear more hawkish FED statements. That will lead to stronger DXY and weaker EUR. On a technical basis the first resistance is 1.0345 and first support is 1.0135 Level.
The dollar index firmed up above 106.5 on Monday after jumping nearly 1% in the previous session, underpinned by a surprisingly strong monthly jobs report last week that reinforced that Federal Reserve’s case for further monetary tightening. The US economy unexpectedly added 528,000 jobs in July, more than double the 250,000 jobs economists predicted, easing recession fears as the labor market remained solid even in the face of high inflation and rising interest rates. Markets are betting that the Fed will deliver another 75 basis point rate hike in September, with Fed Governor Michelle Bowman saying on Saturday that she supports the central bank’s quarter point rate hikes and believes they should continue until inflation is subdued. Investors now turn their focus to a key inflation report due on Wednesday that could offer more clues on the Fed’s rate hike path.
Major European bourses are seen opening in the green on Monday, with investors awaiting fresh economic releases and more corporate earnings to assess the economic outlook and risks of a recession. On the data front, US inflation and UK GDP will be in the spotlight later in the week. On the corporate front, Siemens Energy warned of a bigger than expected net loss in 2022 due to the restructuring of its business in Russia. Porsche and BioNTech are also due to report quarterly results today.