EUR/USD Targets 1.1275 as Soft US Inflation Boosts Euro

EUR: 1.1275 is the next target for EUR/USD

Soft US inflation data has been good news for all the pro-cyclical currencies including the euro. EUR/USD is comfortably trading at new highs for the year and the next technical target would be 1.1275 as it continues to retrace the 2021-2022 decline. For today, look out for the account of the 15 June European Central Bank meeting. Presumably, the ECB will see no advantage in trying to diffuse market pricing of two further 25bp rate hikes this year.

Elsewhere, we note EUR/CHF breaking down to some new lows. We would not chase this too much lower since the Swiss National Bank will be getting a lot of their desired appreciation in the nominal trade-weighted Swiss franc from the big move lower in USD/CHF.