The US Consumer Price Index (CPI) is expected to rise by 3.1% year-over-year in February, matching January’s increase. However, annual Core CPI inflation is forecasted to decrease to 3.7% for the month. The upcoming inflation report, to be released by the Bureau of Labor Statistics (BLS) on Tuesday, could provide crucial insights into the timing of the Federal Reserve’s policy pivot.
Federal Reserve Chairman Jerome Powell recently highlighted the uncertain economic outlook and hinted at a potential policy rate cut sometime this year. The markets are currently pricing in a nearly 75% probability of a rate cut in June. Stronger-than-expected inflation data could lead to a USD rebound, while a monthly Core CPI print in line with market consensus could solidify June as the month of the policy pivot.
Eren Sengezer, European Session Lead Analyst at FXStreet, has offered a technical outlook for the EUR/USD currency pair. Resistance levels are set at 1.0960 and 1.1000, with support at 1.0830-1.0840.
With the high-impact CPI data looming, investors and analysts will be closely monitoring the release for any signs of potential policy shifts by the Fed. The US economy’s inflation rate will likely play a significant role in shaping monetary policy in the months ahead. Stay tuned for updates on the CPI report and its potential implications for the financial markets.
