The Eurodollar is in the spotlight today on capital markets, as all eyes turn to the key U.S. data release at 12:30 PM GMT —namely, the May CPI inflation report—which could trigger increased volatility in dollar-related currency pairs.
12:30 PM GMT – U.S. CPI for May:
- Expected year-over-year increase: 2.4%, compared to 2.3% in April
- Expected month-over-month change: 0.2%, in line with the previous reading
Core CPI (excluding food and energy):
- Expected year-over-year increase: 2.9%, compared to 2.8% previously
- Expected month-over-month change: 0.3%, up from 0.2% in the prior report
EURUSD (1-hour interval chart)
Looking at the EUR/USD chart, we observe a strong resistance zone around 1.144–1.150, which tends to trigger selling pressure. If inflation data comes in significantly below forecasts, we could see a breakout on the chart, driven by a weaker dollar and growing market expectations for faster Federal Reserve rate cuts. However, even the mere absence of an increase in the May CPI figure might be interpreted by the market as dovish.
On the flip side, nearly all data—from ISM manufacturing and services indices to inflation expectations surveyed by the University of Michigan—suggest that consumers expect higher prices, and businesses view this scenario as increasingly likely. Should inflation surprise to the upside, the resistance near 1.144–1.150 could strengthen further, potentially pushing the pair back toward the 61.8% Fibonacci retracement of the latest downward wave, around 1.138.
Source: xStation5
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