Key points:

• Euro’s life choices
• Dollar’s inflation data
• Battle of the upper line

Big day today. Inflation print is coming to show whether war jitters and oil prices have affected the mighty American economy. Spoiler: They likely did to the tune of 3.7%.

💶 Euro Keeps Knocking

• The EURUSD hovered near $1.1760 early Tuesday, pressing against the upper boundary of a descending channel that has contained price action since late January. Third breakout attempt’s the charm? Traders are about to find out.
• A descending channel is a bearish chart pattern where prices make lower highs and lower lows inside downward-sloping trendlines. Breaking above it can signal momentum shifting back toward buyers.
• Bulls are eyeing a move above the $1.1780–$1.1800 area to confirm a breakout. Meanwhile, a drop back below $1.1730 would suggest dollar buyers still have firm control of the battlefield.

📊 CPI Day

• Markets are now all eyes on the latest US inflation report. Economists expect April headline CPI to rise 3.7% year-over-year and 0.6% month-over-month as higher energy prices continue filtering through the economy.
• Quick jargon check: CPI, or Consumer Price Index, tracks changes in consumer prices and is one of the most important indicators for interest-rate expectations and Federal Reserve policy.
• Traders are especially watching whether the recent surge in gasoline prices tied to Middle East tensions has reignited inflation pressures. Oil production may live thousands of miles away, but it still shows up at the checkout counter.

⛽ Housing and Core Inflation Matter

• Beyond energy, investors are keeping a close eye on core inflation, which strips out volatile food and energy prices to provide a cleaner view of underlying price trends.
• Housing costs remain one of the stickiest parts of inflation and could end up driving the report more than gasoline itself. Sticky inflation simply means prices are proving stubbornly slow to cool down.
• What about the dollar? Hotter inflation could strengthen expectations for higher US interest rates, potentially boosting the greenback. Cooler numbers could weaken the dollar and finally give the euro enough room to escape its descending channel pattern.

Source: Tradingview