EUR/USD perks up ahead of US CPI (with seasonality on its side)

December is usually a positive month for EUR/USD, and yesterday’s bullish close suggests it could be set for another leg higher, if US inflation allows.

Charts (6)

Traders are expecting a hot CPI print tomorrow. But, what if it misses expectations? Inflation will likely still be hot but, with expectations now high alongside a hawkish Fed, a softer-than-forecast print tomorrow could leave some dollar bulls disappointed.

And that would be beneficial for EUR/USD, which is already suggesting it has seen the low for the week, if not the month. We’ve not lost sight of the fact the euro remains in a strong downtrend, but as we explain in today’s video, price action appears to be in a wave C of an ABC countertrend correction. And a soft inflation report form the US would make this more likely. This also ties in with our analysis from the end of November that the US dollar appeared set for a correction. So, in today video, we analyse the EUR/USD spot chart and include seasonality analysis for December.

Everything you need to know about CPI and forex

 

 

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