EUR USD

EUR/USD rises from 17-month low but French fiscal and political concerns linger. USD/JPY looks to US CPI data.

Tomorrow brings an important inflation print as Treasury yields have started to stall and expectations for rate hikes have pared back. But another jolt to inflation could tilt those odds and impact price action across the USD complex.

Amid a lack of any major news, the FX markets have been largely in consolidation mode in the first half of Tuesday’s session. The US dollar eased along with bond yields and oil prices, allowing downbeat currencies like the euro to rebound modestly. With US CPI data due for release on Wednesday, don’t expect much in the way of a sharper decline in USD ahead of it. If anything, we could see the dollar buying resume, especially if crude oil prices catch a bid again amid the ongoing situation.

EUR/USD is trading at 17-month lows near 1.1160 as political developments in Germany and Spain inject uncertainty into the euro’s outlook - where is the next support ahead of US CPI?

News over the weekend, including continued Houthi strikes in Riyadh has had negative impact on foreign currencies so far, especially those where the economy relies on energy imports. The EUR/USD is particularly vulnerable as lingering concerns over French fiscal policy continue to undermine the euro.

Oil weighs up Russia developments against Middle Eastern tensions. EUR/USD struggles around 1.12 with US and EZ inflation data this week.

US yields are falling, Fed tightening expectations are easing, yet the dollar remains firm. French debt concerns may help explain why, with several major currency pairs approaching important technical levels.

Despite a deep oversold read bulls didn’t exactly come screaming back into the EUR/USD market, although a series of higher-lows may be an early warning that a turning point may be near.

The US Dollar remained strong last week even as EUR/USD started to show a series of higher-lows. USD/JPY continues to be bought on dips as the fundamental deviation between the two economies remains front-and-center.

The yen has reacted to falling US yields, but the euro faces a different problem. Could French government bond yields provide the additional push needed to break EUR/USD's downtrend?

Recent trading sessions continue to present a challenging environment for the euro in the short term. This can be seen in the performance of EUR/USD, which has declined by approximately 0.5%, reflecting another loss of ground for the European currency and highlighting the continued strength of the U.S. dollar.

It’s been a painful run for EUR/USD as the pair has lost more than 500 pips in a month and a half, but with the pair now deeply oversold the big question is whether sellers can stretch.