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EUR/USD jumps after US inflation data

FXStreet (Córdoba) - EUR/USD pushed to fresh daily highs at the beginning of the American session after data showed US consumer prices grew less than expected in August.

The greenback weakened across the board and EUR/USD surged to fresh highs as both the core and the headline US CPI came in at 1.7% year-over-year in August versus 1.9% expected. The CPI fell 0.2% MoM (0.0% exp) while the core was flat (vs +0.2% exp).

EUR/USD jumped 25 pips on the news and hit a peak of 1.2980 but lacked follow-through as investors seem unwilling to take big positions ahead of the Federal Reserve monetary policy statement. Markets are expecting a hawkish shift in Fed stance, so any change in forward guidance might increase the appeal of the US dollar.

EUR/USD technical levels

At time of writing, EUR/USD is trading at 1.2970, 0.09% above its opening price, with immediate resistances lining up at the 1.2994/1.3000 zone (Sept 16 high/psychological level), 1.3059 (21-day SMA) and 1.3100 (psychological level). On the flip side, supports are seen at 1.2939 (10-day SMA), 1.2908 (Sept 15 & 12 low) and 1.2900 (psychological level).

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