US October CPI Overview
Today's US economic docket highlights the release of the latest consumer inflation figures, due for release later during the early North-American session at 1330GMT. The headline CPI is expected to have risen by 0.3% m/m in October and the yearly rate is anticipated to accelerate to 2.5% y/y, up from the previous month's 2.3%.
Meanwhile, core CPI, which excludes volatile food and energy prices, is forecasted to edge higher by 0.2% on a monthly basis, a slightly faster pace than 0.1% recorded in September, and hold steady at 2.3% y/y rate during the reported month.
Deviation impact on EUR/USD
Readers can find FX Street's proprietary deviation impact map of the event below and as observed, the reaction in case of a relative deviation of +0.98 to -1.25 in the core CPI print is likely to be in the range of 24-26 pips during the first 15-minutes and could stretch to around 68-71 pips in the following 4-hours.
How could it affect EUR/USD?
Yohay Elam, FXStreet's own Analyst explains, “the pair failed in its first attempt to reconquer 1.1300. The level is not only a round number but also a critical line after working as a double-bottom. The Relative Strength Index (RSI) is out of oversold territory (below 30), but Momentum still points to the downside.”
“Support awaits at 1.1260 which temporarily capped the EUR/USD on Tuesday. 1.1215 is the 17-month low. Further down, we are back to levels last seen in 2017: 1.1110 and 1.1000 are notable,” he added further.
Key Notes
• US Inflation Preview: Stability in core CPI, temporary gain in consumer index
• EUR/USD Forecast: The Good, the Bad, and the Ugly, still looking vulnerable
• EUR/USD Technical Analysis: Spot looks vulnerable and still targets 1.1188
About the US CPI
The Consumer Price Index released by the US Bureau of Labor Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchasing power of USD is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as positive (or bullish) for the USD, while a low reading is seen as negative (or Bearish).
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