EUR/USD Stalls at Fibonacci Resistance After Soft US CPI Data

EUR/USD surged Tuesday after a softer-than-expected US Consumer Price Index report prompted traders to scale back Federal Reserve tightening bets, sending the dollar broadly lower and lifting the pair in immediate post-release trading. Both headline and core inflation undershot forecasts, reinforcing the narrative that price pressures are continuing to cool — though Fed Chair Warsh and other officials were quick to warn that a single benign data print won't shift policy direction.

The post-CPI rally ran directly into a wall at 1.1462, which aligns almost precisely with the 38.2% Fibonacci retracement of the pair's decline from its May 29 high. Sellers defended that level aggressively, choking off upside momentum and forcing a swift reversal. The failure to clear that retracement left the broader corrective bounce without conviction and handed technical control back to the bears, at least temporarily.

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The pullback drove EUR/USD down to its key hourly moving averages — the 200-hour MA at 1.1423 and the 100-hour MA at 1.1417 — where buyers stepped in and stabilized the pair near 1.1431. That defense keeps the short-term outlook neutral, but the margin is thin and the battle lines are now clearly drawn between those two moving-average supports and the Fibonacci ceiling above.

From here, the technical outcome hinges on which side blinks first. A sustained break below the 100- and 200-hour moving averages would hand sellers the advantage and open the door to a deeper retracement of today's CPI-driven gains, signaling the market has dismissed the soft inflation impulse. Conversely, bulls need to recapture and close above 1.1462 to shift focus toward higher resistance targets and put the corrective rally back on firmer footing.

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