EUR/USD rises despite trade war risks as markets pivot to US CPI inflation data

EUR/USD rose 80 pips, or 0.76%, on Tuesday.

Fiber markets have evaded the worst of the US’s ongoing tariff spat.

Key US data dominates the rest of the week’s calendar releases.

EUR/USD bidders found the gas pedal on Tuesday, bolstering Fiber further and sending the pair back into the 1.0950 level, albeit briefly. The pair tested into fresh 22-week highs as Euro bulls continue to press further into recovery territory.

US data remains the focal point for fx traders this week. This week, EU economic data is notably sparse; however, significant US data releases are scheduled back-to-back for most of the week. The US JOLTS job openings data was a bit stronger than anticipated, offering some stability to shaken markets. Job postings rose to 7.74M in January, exceeding the forecast of 7.63M and up from December’s revised figure of 7.51M, adjusted down from 7.6M.

On Wednesday, the US Consumer Price Index (CPI) inflation data for February takes center stage. Following an unexpected rise in consumer-level inflation in January, which dashed hopes for a swift return to rate cuts by the Federal Reserve (Fed) in 2025, markets are largely anticipating a lower February figure. Headline CPI inflation is projected to decrease to 2.9%, down from 3.0% year-over-year.

The US Producer Price Index (PPI) inflation report is expected on Thursday. While there's hope for a lessening inflation trend in consumer prices, business-level inflation is likely to remain persistently high, with core PPI inflation expected to maintain a steady rate of 3.6% year-over-year.

Friday will conclude with the University of Michigan Consumer Sentiment Index for March, along with the UoM’s Consumer Inflation Expectations. The UoM sentiment index is predicted to decline slightly to 63.4 from 64.7, reflecting a weakening economic outlook amid Donald Trump’s efforts to ignite a global trade war simultaneously with multiple countries.

EUR/USD price forecast

EUR/USD has closed flat or higher for all but one of the last six consecutive trading session, rising 5.5% in the process. Fiber has climbed nearly 7.6% bottom-to-top from the last major swing low near 1.0175, with bulls easily snapping the 200-day Exponential Moving Average (EMA) in the process.

EUR/USD is now running aground of technical resistance just north of the 1.0900 handle, a technical region that flummoxed Euro bulls the last time around back in October and November of last year.

EUR/USD daily chart