EUR/USD testing critical $1.10 support after US CPI upside surprise

The US dollar is trying to push higher through critical technical resistance levels after the US consumer price index registered its strongest showing in seven months.

The US dollar is trying to push through key resistance levels against the euro after news that US consumer prices jumped at a higher pace than expected last month, rising the most in seven months. Higher inflation bolsters the case for the US Federal Reserve to continue standing pat on interest rates, a policy the central bank ennunciated last week after initiating a series of interest rate cuts earlier this year.

The US consumer price index (CPI) climbed by 0.4% in October, a stronger pace than the 0.3% expected generally by the market. However, CPI is only climbing at a 1.8% annual rate, below the Federal Reserve target of 2%, and well below last year's peak annual rate of 3%.

EUR/USD $1.10 level still key

Just after the CPI report hit in early New York trading,EUR/USD pushed just a few pips below the $1.10 level after trading slightly higher than $1.10 in late Tuesday trade.

Technical analysts say that a meaningful breach of the $1.10 level will be critical is the US dollar is to resume its nearly two-year rise against the euro and push to new highs. Conversely, if the euro bulls can succesfully defend the $1.10 level, the case for a reversal of the two-year greenback rally gets stronger.

Since early October, EUR/USD has traded in a broad range of $1.12 to $110, and the longer the pair stays in that channel the more the euro consolidates its strong October gains and the greater the chance of another euro break to the upside.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.