Markets had been hoping to see signs of inflation peaking in April’s print, and despite slowing down relative to March, both CPI and PPI continued to top expectations.
This resulted in a strong sell-off in EUR/USD on Thursday, and the pair now looks extremely vulnerable after breaking key support.
Read our latest analyst article for an insight into this month’s inflation data and where EUR/USD could be headed next:
The 1.0500 level was acting as a good support level for the EURUSD, but once it broke to the downside, the pair dropped below the 1.0400 level. Though, the 1.0300 level could act as a better support.
You could be right about 1.0300 acting as a better support as it coincides with lows from 2017, although a break below could potentially open the possibility to a deeper pullback towards parity.
Should be interesting to watch how it plays out!