EUR/USD Tumbles After CPI

from Daily Forex. This is Christopher Lewis taking a look at the euro against the US dollar. The euro initially did try to rally against the US dollar during early trading on Tuesday, but has since fallen, which has been exacerbated by the hotter than anticipated CPI figures coming out of the United States. With the CPI figures a tenth of a percent higher than anticipated in both the core and the regular CPI readings. This adds further pressure on the Federal Reserve to keep monetary policy somewhat restrictive. The ECB on the other hand has been very non-committal about its monetary policy and doesn't look ready to tighten. At least not quite yet. Beyond that, you have to worry about energy in the European Union. this winter. That is still a very valid concern. And if that is going to be the case, the European economy is not going to be doing well and that could cause the ECB to loosen policy. Regardless, the Americans continue to see plenty of inflation. There are plenty of headwinds out there to growth in general, and a lot of people are taking advantage of those positive real yields coming out of the United States. So it all adds up for a pro- US dollar story on the margins. The market has been consolidating between 1.1250 and 1.11. And I think that probably continues to be the case, but eventually we will break out of this directional uh sideways directional box. And with that being the case, I think it gives us the next clear sign. Rallies at this point in time, I still don't trust. It's really not until we break above 1.1350 that I would look at this as a market that I would want to buy. I think it's probably just as likely, if not more, that we reach 1.10.