News report 💱 Forex 🌍 United States

EUR/USD Slips to 1.1138 as US Dollar Hits 102.51 on Hot CPI Data

The US Dollar strengthened to a four-week high of 102.51 after October core CPI rose 0.30%, pushing EUR/USD down to 1.1138 as traders price in a 13.5% chance of a 50bps Fed hike.

🕐 1 min read

2 assets impacted (Forex). Net bias: 1 Bullish, 1 Bearish, 0 Neutral. Strongest signal: EUR/USD ↓ 6/10 (80% confidence).

📊 Affected Assets (2)

EUR/USD
Bearish 🤖 80%
📅 Short-term 🌍 GLOBAL · Explicit

October core CPI came in at +0.30% versus +0.2% expected, the third straight +0.3% month, pushing markets to price a possible 50bps Fed hike in December (13.5% odds). The dollar strengthened, with DXY at a fresh almost four-week high of 102.51, and EUR/USD fell 0.2% to 1.1138, holding below the 20-day EMA at 1.1200 with the RSI at 41.

Catalysts
  • ▼ Hotter-than-projected October US CPI: core +0.30% MoM vs +0.2% expected, headline +0.35% vs +0.3%
  • ▼ Markets starting to price a 50bps Fed rate hike in December (~13.5% odds per CME FedWatch)
Risk Factors
  • ▲ Rate-hike odds are still nominal at around 13.5%
  • ▲ ECB succession uncertainty (Klaas Knot signals readiness to act) could keep the Euro highly volatile in either direction
USD
Bullish 🤖 80%
📅 Short-term 🌍 US · Explicit

October core CPI at +0.30% versus +0.2% expected, the third consecutive +0.3% print, makes it hard to dismiss inflation acceleration. Markets have begun pricing a possible 50bps Fed hike in December, lifting the DXY to a fresh almost four-week high of 102.51 and making the dollar the strongest against the Swiss Franc today.

Catalysts
  • ▲ October core CPI +0.30% MoM vs +0.2% expected; 3-month annualised core pace +3.75%, fastest since April 2024
  • ▲ Fears of an aggressive Fed tightening cycle; ~13.5% odds of a 50bps December hike
Risk Factors
  • ▼ The 50bps hike odds remain nominal at around 13.5%
  • ▼ A broader corrective pullback in EUR/USD above 1.1200 would signal dollar weakness

🧭 Full analysis of these assets

🎯 Key Takeaways

  • October core CPI rose +0.30% MoM, exceeding the +0.2% consensus and marking the third consecutive month at this pace.
  • The US Dollar Index (DXY) climbed to a fresh four-week high of 102.51.
  • CME FedWatch data indicates a 13.5% probability of a 50bps interest rate hike by the Federal Reserve in December.
  • EUR/USD is trading at 1.1138, remaining below the 20-day EMA of 1.1200 with an RSI of 41.
  • Immediate support for the pair is identified at 1.1104, with further downside risk toward 1.1000.

📝 Executive Summary

The EUR/USD pair fell 0.2% to 1.1138 on Wednesday as the US Dollar Index reached a four-week high of 102.51. Markets are reacting to October core CPI data, which printed at +0.30% against expectations of +0.2%, fueling speculation of a potential 50bps Federal Reserve rate hike in December.

❓ FAQ

EUR/USD · Why is EUR/USD falling?

US inflation data for October came in above expectations (core CPI +0.30% vs +0.2% expected), raising fears of a more aggressive Federal Reserve and lifting the dollar, which pushed the pair down 0.2% to near 1.1138.

EUR/USD · What levels should I watch?

The recent low of 1.1104 is the immediate support, with 1.1000 below it; a recovery above the 20-day EMA near 1.1200 would be needed to ease the bearish bias.

USD · Why is the dollar strengthening?

Hotter-than-projected October US CPI (core +0.30% vs +0.2% expected) raised fears the Fed could tighten more aggressively, even pricing a possible 50bps December hike, pushing the DXY to a fresh almost four-week high of 102.51.