EUR/USD stalls below 1.1550 ahead of US CPI data

EUR/USD slipped to 1.1535, staying just under the 1.1550 ceiling as traders brace for the July US Consumer Price Index release, which could tip the Fed’s rate‑path decision.

Market context and price action

The pair retreated from last week’s high of 1.1580 and now sits in a narrow range between 1.1500 support and 1.1550 resistance, with the 4‑hour RSI near 48 indicating balanced momentum and the MACD slightly negative, suggesting no clear trend direction【3】. German HICP data showed a YoY rise to 2.8% in July, up from 2.4% in June, driven by a jump in energy inflation to 7.3% from 2.7%【3】. Despite the stronger German inflation, the Euro failed to break higher, as investors remain focused on US CPI expectations of a 3.4% YoY increase, down from 3.5% in June, and core inflation easing to 2.5% YoY from 2.6%【3】.

Drivers and broader backdrop

Geopolitical tension in the Middle East, including recent attacks on vessels in the Straits of Hormuz and Bab el‑Mandeb, has weighed on risk sentiment and limited the US Dollar’s rally, keeping the EUR/USD pair in a low‑volatility environment【3】. In Europe, inflation expectations for the next year sit at 2.4%, above the ECB’s 2% target, while July eurozone inflation edged up to 2.9% and Q2 growth hit 0.4%, the strongest since early 2025【2】. These fundamentals have led analysts to anticipate another 25‑basis‑point ECB rate hike in September, but the immediate market focus remains on US CPI to gauge the Fed’s stance【2】.

Technical outlook

If EUR/USD can sustain a break above 1.1550, the next resistance lies at 1.1580, followed by 1.1620 and 1.1685, echoing prior highs. Conversely, a dip below 1.1500 would reopen the 1.1480 zone and could pull the pair toward the July low of 1.1355【3】.

What to watch

• US July CPI release (expected 3.4% YoY, core 2.5% YoY) – any deviation could shift the pair.
• Break of 1.1550 resistance or fall through 1.1500 support – key technical thresholds.
• ECB policy outlook – potential September rate hike may reinforce euro strength.

The EUR/USD’s near‑range stance underscores how tightly US inflation data now anchors forex moves, with the euro’s modest gains hinging on whether US price pressures ease or intensify.