EURUSD: Analyzing CPI Trends for Fed's Rate Decision in March

Hey Traders, in today's trading session we are monitoring EURUSD for a selling opportunity around the 1.07700 zone. EURUSD was previously trading in an uptrend and successfully managed to break it out. Currently, it is in a correction phase, approaching the retrace area at 1.07700 support and resistance zone.

The recent release of US Core CPI data on February 14th, 2024, revealed a significant increase of 0.4%, surpassing both the expected 0.3% and the previous 0.3% readings. This marks a consistent uptrend in CPI data over the past few months, indicating growing inflationary pressures within the US economy. Such robust CPI figures are likely to influence the Federal Reserve's monetary policy decisions, particularly regarding the possibility of rate cuts in March.

The strengthening CPI trend suggests that the Federal Reserve may refrain from implementing rate cuts in the upcoming March meeting. The elevated inflation levels, as evidenced by the recent CPI data, could prompt the Fed to adopt a more cautious approach to monetary policy adjustments, including maintaining or even tightening interest rates. Consequently, this fundamental outlook could exert downward pressure on EURUSD as market participants anticipate a less dovish stance from the Fed.

Trade safe,
Joe.

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