EUR/USD slightly benefits from softer US dollar

The EUR/USD pair slightly benefited from the US dollar’s sell-off but to a lesser degree than other assets including the Pound Sterling, and the Japanese yen. The pair remains in the same range that has been in play for the past 15 months, and price has made a fast move towards range resistance, but the pair is still in the red territory, down -0.09 % at 1.924 at the time of writing.

The pair also reacts after erasing February gains due to the early-month rally driven by NFP from last Friday. The intermediate-term trend has been higher since the middle of February, around the time of Austan Goolsbee’s ‘flipped out’ comment following the CPI report released last month. This helped keep USD bulls and EUR/USD bears, and reversal moves have built in the month since.

The market outlook for EUR/USD was busy in February, with strength holding through the early portion of the month, with strong jumps around the NFP report on February 2nd and the CPI report released on the 13th.

The President of the Chicago Fed talked down the continued elevation showing in Core CPI, saying that market participants should avoid getting ‘flipped out’ about a single inflation print. Core CPI has remained sticky near the 4% mark for the past five months, which speaks to the prospect of inflation entrenchment, which could be a risk of stopping rate hikes too early.