EUR/USD: CPI Reaction Creates Ideal Short Entry

EUR/USD recovered sharply after US CPI data.  It hits a intraday high of 1.11746 and currently trading around 1.11703.

Today's release of the US Consumer Price Index (CPI) for April 2025 showed a 0.2% month-to-month increase, reversing last month's fall of 0.1%, and a 2.3% year-on-year increase, just below March's year-on-year increase of 2.4%. The CPI reading reached an all-time high of 320.80. Core inflation remained at 2.8%. Overall, the report indicates moderate inflation, a shade over the 2% target of the Federal Reserve, and markets and policymakers are observing the impact of tariffs and overall economic trends as the Federal Reserve avoids reducing interest rates.

Technical Analysis of EUR/USD

The pair is holding  below short and  long term moving average in the 4-hour chart. Near-term resistance is seen at 1.1180; a break above this may push the pair to targets of 1.1180/1.1225/1.1278/1.1320/1.13790.  Major bullish momentum is likely only if prices are able to break above 1.160 targets 1.1660. On the downside, support is seen at 1.1090 any violation below will drag the pair to 1.1050/1.100.

Market Indicators and Trading Strategy

Commodity Channel Index (CCI)-  Bearish

Average Directional Movement Index (ADX) - Neutral

 It is good to sell on rallies around 1.1178-80 with a stop-loss at 1.1225 for a  target price of 1.1000.