Economists at Credit Suisse expect the EUR/USD pair to push lower on strong US data.
Euro-area core CPI to drop to 5.4% YoY from 5.6% previously
“If US data are strong enough this week to shake convictions on priced-in rate cuts down the line, there is nothing to stop EUR/USD pushing still lower to test the 200-DMA around 1.0491. As such, tactically we would prefer to be short EUR/USD from 1.0732 with a stop at 1.0835, with a target of 1.0500.”
“We look nonetheless for Euro-area core CPI to drop to 5.4% YoY from 5.6% previously, below market expectations for 5.5%. Such an outcome would help our tactical short EUR/USD view by dissipating pressure for Euro-area rates to track US ones if the latter move higher again.”
See – Eurozone HICP Preview: Forecasts from four major banks, sharp drop in inflation