US CPI data release for June scheduled at 1:30 pm BST is a key macro release of the day. Market expects a slight slowdown in the headline gauge with a drop from 5.0% to 4.9% YoY. However, core gauge is expected to show acceleration in price growth with an increase from 3.8% to 4% YoY. Reading will be closely watched by the markets as it will hint whether the Fed is right with its assessment of inflation as temporary. Unexpected acceleration could intensify discussion about the need for tightening and may boost USD.
EURUSD halted recent upward correction at the short-term swing area at 1.18825. Downtrend structure looks to be left intact. The pair is testing 33-period EMA on H4 interval (green line) and breaking below this hurdle would pave the way for a test of the support zone at 78.6% retracement of the upward move launched at the end of March (1.1825 area). Upper limit of the Overbalance structure at 1.1900 is a key resistance to watch. Breaking above 1.1900 could hint at trend reversal.
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Source: xStation5
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