EUR/USD battles to extend the rally beyond 1.18

Equities continue to rally, providing support to the shared currency as the EUR/USD pair is nearing the 1.18 level but a bullish continuation is not yet confirmed. On the data front, US inflation ticked higher in July, further boosting the positive ruling mood, FXStreet’s Chief Analyst Valeria Bednarik reports.

Key quotes

“The US has just published July inflation data. The monthly consumer price index was up 0.6% in the month, matching the previous month reading and beating expectations of 0.3%. Yearly basis, the CPI was up 1%, while the core yearly reading printed at 1.6%, both beating expectations.”

“The 4-hour chart shows that EUR/USD is currently advancing above a bearish 20 SMA, after finding buyers around a bullish 100 SMA. Technical indicators, in the meantime, head north but remain stuck to neutral levels.”

“The EUR/USD pair would need to advance beyond 1.1830 to confirm an upcoming bullish extension towards this year high at 1.1915.”