The dollar selling continues and that includes a move to new highs for the EURUSD.
Looking at the 4-hour chart above, the price has now moved above a swing area between 1.08424 and 1.08485 (see video from earlier today). The next target comes against the 50% midpoint of the move down from the April high. That level comes in at 1.0865. Getting will the 50% retracement opens the door for further upside momentum in the pair
The run to the upside today also was able to extend above both the 100-day moving average at 1.0805, the 38.2% retracement of the same move down at 1.08108, and more recently the 200-bar moving average on the 4-hour chart at 1.08340. That moving average level will now be a close risk for buyers looking for more upside. The price has not traded above its 200-bar moving average since May 11.
The PPI data released earlier was good news on inflation. Pipeline inflation seems to be under control. Will that lead to lower consumer prices going forward? Yesterday the CPI data came in at 4.0% year on year. Next month, a gain of 1.3% will drop out of the equation and could lead to a tumble to 3% or lower.
The FOMC has this as a backdrop as they decide on rates today and going forward. The market is not expecting any change today but is keeping the door open for a hike in July. Before that decision, another employment report will be released along with another CPI.
Meanwhile, the ECB will meet on Thursday with the expectations of a 25 basis point hike. That should be supportive for the EURUSD.
