EUR/USD is rising for a second straight session as the US dollar remains under pressure following softer-than-expected U.S. inflation data, with the single currency strengthening to trade around $1.141 as it capitalizes on the dollar's broad-based weakness. According to reports from Investing.com India, the U.S. dollar has pulled back from a two-week high after June CPI fell 0.4% month-on-month, marking the first monthly decline in six years. The softer inflation reading prompted investors to scale back expectations of a near-term Federal Reserve rate hike, with markets now pricing a 56% probability of a September hike, down from 78% before yesterday's CPI release. However, investors still see around an 80% chance of at least one rate hike before the end of the year. As per latest reports, oil prices are up around 12% so far this week amid escalating U.S.-Iran hostilities, with Washington reimposing its blockade on Iranian ports and President Trump threatening to expand strikes. This development may already be viewed as somewhat stale given the recent inflation data, with attention now turning to U.S. producer price inflation.
As reported by Investing.com India, Federal Reserve Chair Kevin Warsh reiterated yesterday that the Fed remains fully committed to returning inflation to its 2% target, reinforcing the central bank's inflation-fighting stance. In his inaugural congressional testimony, Warsh struck a highly resolute tone, underscoring that the central bank remains fully committed to aggressively stamping out structural inflation. The euro is benefiting from the weaker dollar, although renewed gains in oil prices could ultimately limit the upside if higher energy costs revive inflation concerns globally. In the eurozone, industrial production data is due later today and is expected to show output fell 0.5% year-on-year in May after rising 0.3% previously, highlighting the region's still-fragile manufacturing backdrop. Meanwhile, U.S. producer price inflation is expected to rise 0.4% month-on-month, matching May's pace, while the annual rate is forecast to accelerate to 5.2% from 4.9%. A stronger-than-expected reading could reinforce expectations that pipeline inflation pressures remain elevated despite softer consumer inflation.
According to Investing.com India, the FTSE 100 is opening lower and underperforming its European peers despite supportive oil prices, as weakness in mining stocks outweighs gains in the energy sector. Chinese GDP slowed to 4.3% year-on-year in the second quarter, below expectations of 4.5% and down from 5.0% in Q1, marking the weakest quarterly growth rate since modern GDP records began in the 1990s. The reading raises fresh concerns over demand from the world's largest consumer of industrial metals, with industrial miners trading lower as a result. Meanwhile, oil prices are rising for a third straight session after renewed hostilities between the U.S. and Iran, with Washington reimposing its blockade on Iranian ports and President Trump threatening to expand strikes on Iranian civilian infrastructure unless Tehran resumes negotiations. The prospect of tighter crude supplies has lifted oil prices, providing support for the FTSE's energy heavyweights, but the broader index is under pressure as higher oil prices revive inflation concerns and push Treasury yields higher, weighing on non-yielding assets such as gold.
As reported by Investing.com India, EUR/USD continues to trade within a falling channel that has been in place since mid-April, with the pair remaining below both its 50-day and 200-day SMAs. The pair has recovered from the 2026 low at 1.1325 but the rebound has stalled around 1.1450, where the upper boundary of the falling channel sits. Should this resistance continue to hold, sellers will look for a move back towards 1.1350 and 1.1325, while a break below 1.1325 would create a fresh lower low, exposing 1.1300 ahead of 1.1200. On the upside, a break above 1.1450 would weaken the current bearish structure and bring 1.1500 into focus, followed by 1.1600 and the June 17 swing high. The FTSE 100 continues to trade above its rising trendline and remains above both the 50-day and 200-day SMAs, keeping the broader technical picture constructive. The index recently failed to break above the 10,700 resistance zone before pulling back, although buyers successfully defended support around the 50-day SMA. Buyers will look for a break above 10,575 to retest the 10,700 resistance area, with a move above there bringing the record high at 10,950 back into focus. Initial support is located around the 50-day SMA at 10,400, followed by the rising trendline near 10,380.
