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  • The inflations rate increased below expectations creating speculations about Fed decision on Tapering
  • Fed’s meeting will take place next week
  • CPI released apparently proved that inflation was a transitory phenomenon
  • Although the price is still above 1.18, a small downtrend seems to shows certain optimism from investors.

The EUR/USD price analysis suggests a neutral to bearish price action as the pair failed to maintain yesterday. Overall, the price is stagnant.

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This Tuesday, the most important event on the economic calendar took place with surprising data about the inflation rate in the US. The Consumer Price Index revealed that the Core inflation rate of MoM was 0.1% instead of 0.3% expected, and the Inflation rate. MoM was also lower than expected, reaching 0.3% instead of 0.4%. In addition, the annual Core inflation rate was also lower than expected, 4% instead of 4.2%.

Finally, YoY inflation fulfilled market expectations but also showed that inflation seems to be under control. This data created speculations about when the Fed will decide to taper since the released IPC appears to give reason to Fed Chairman Jerome Powell proving that inflation was transitory, which reduces the urgency to taper. However, the pair retraced on Tuesday, indicating that the market is still optimistic about the Fed meeting next week.

For the rest of the week, the development of the pair will still depend mostly on the economic announcements from US financial authorities since the comments from European decision-makers as Christine Lagarde last week and ECB executive board member Isabel Schnabel this Tuesday didn’t impact the pair. On September 16, the Retail Sales Index MoM and on September 17, the Michigan Consumer Sentiment and the Core Inflation on the Eurozone will be published.

The price has been moving sideways since the beginning of the week. If a breakout occurs, an uptrend could take the price to test the resistance level of 1.909 again. Otherwise, a downtrend below the august low would bring attention to the level of 1.1580.

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EUR/USD price technical analysis: Sideway movement finds resistance

After the attempt to surpass the July high (1.1909), the pair may face difficulties to stay over the 50-day EMA. From a wider perspective, the rebound from August may be seen as a correction on a longer trend.

EUR/USD daily price chart analysis

The price remains below the 200 MA on the hourly chart. We find resistance levels at the 1.1845 and 1.1850 levels.

EUR/USD hourly price analysis

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