US CPI Preview: What to expect of EUR/USD

US Inflation figures tracked by the CPI and Retail Sales are due later today, with consensus seeing consumer prices rising at 0.3% inter-month in June and headline sales up 0.1% during the same period.

Strategists at TD Securities have assessed a potential impact on the greenback, arguing “A greater focus likely to be placed on the inflation data along with our downside bias for our already below market expectation, we think the risks lilt lower for the USD. We do not believe this will be a slam dunk case for the USD to spiral lower, but we view it in the context that softer inflation will weigh on Fed expectations”.

Regarding EUR/USD, spot faces initial and critical resistance around the 1.1200 area, where sit the base of the 6-month rising channel and the uptrend off March’s low. When comes to USD/JPY, the current upside momentum needs to clear 106.85 (high June 24) in order to allow a potential test of May’s peak at 111.45.