The EURUSD pair, currently trading at 1.08339, has experienced a significant increase and is approaching 1.0820 due to the notable decline in US PPI, which has been influenced by decreased gasoline costs.

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• EUR/USD has jumped strongly to near 1.0820 as US PPI has softened significantly inspired by lower gasoline prices.

The pair currently trades last at 1.08339.

The previous day high was 1.0824 while the previous day low was 1.0755. The daily 38.2% Fib levels comes at 1.0797, expected to provide support. Similarly, the daily 61.8% fib level is at 1.0781, expected to provide support.

The EUR/USD pair has accelerated dramatically to near 1.0820 after the United States Producer Price Index (PPI) data shows wider-than-expectations deflation. Monthly core PPI contracted by 0.3% in May while the street was anticipating a 0.1% contraction. Investors should note that the economic data reported a pace of 0.2% in April. Annualized headline PPI has softened to 1.1% vs. the consensus of 1.5% and the prior release of 2.3%.

Contrary to that, US monthly core PPI has maintained its pace at 0.2% as expected by the market participants. The annualized core PPI has decelerated to 2.8% against the expectations of 2.9% and the former release of 3.1%.

The impact of weak oil prices is clearly visible in extremely soft PPI figures. Firms have passed on the impact of the sheer decline in gasoline prices to the end consumers as the street has not recognized any sign of a slowdown in the overall demand yet.

It looks like in the list of soft inflation, easing labor market conditions, and weak economic activities, decelerated PPI has been added, which would propel the need of skipping interest rate hikes by the Federal Reserve (Fed). The US Dollar Index (DXY) has attracted significant offers after softer-than-anticipated and has dropped below the crucial support of 103.00.

On the Eurozone front, investors are awaiting the interest rate decision by the European Central Bank (ECB). ECB President Christine Lagarde is expected to raise interest rates by 25 basis points (bps) to 4% in order to sharpen its quantitative tools in the battle above 6% inflation.

Economists at Danske Bank expect a pause by the Fed could pose near-term upside risks to EUR/USD, but we still maintain a bearish view on the cross towards the second half of CY2023.

Technical Levels: Supports and Resistances

EURUSD currently trading at 1.0831 at the time of writing. Pair opened at 1.0793 and is trading with a change of 0.35 % .

The pair is trading above its 20 Daily moving average @ 1.0749, below its 50 Daily moving average @ 1.0879 , above its 100 Daily moving average @ 1.0806 and above its 200 Daily moving average @ 1.0529

The previous day high was 1.0824 while the previous day low was 1.0755. The daily 38.2% Fib levels comes at 1.0797, expected to provide support. Similarly, the daily 61.8% fib level is at 1.0781, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.0757, 1.0722, 1.0689
• Pivot resistance is noted at 1.0826, 1.0859, 1.0895

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