EURUSD - Neutral Post US Inflation Data

EURUSD found support at 1.12 and rebounded from it's strong downtrend since the end of May. However, the 20 day MA at 1.13 is still below the 50 day MA at 1.14 and 100 day MA at 1.15. Additionally, US data released today indicated that inflation is still rising with the Core PCE Price Index YoY at 4.7% vs 4.5% forecast. Rising inflation increases the likelihood of the FED raising rates in 2022 as indicated in the most recent FED meeting, whist the ECB has only indicated it will reduce stimulus in 2022. Therefore, we hold a neutral view as we expect the downtrend will continue but we would first want the currency pair to breach support at 1.12.