EURUSD is under bearish paw ahead of US economic data release

Following last week’s consolidation, EURUSD is now trending lower. The recent escalation of the Middle East crisis and the subsequent surge in crude prices acted as the main triggers of the decline. Expensive oil has reignited concerns over inflation spikes, which, in turn, has boosted demand for safe havens—particularly the greenback.

Higher crude prices swiftly reshaped monetary expectations. The likelihood of a Federal Reserve (Fed) rate hike by year-end skyrocketed to 52%, lifting American Treasury yields and making dollar-denominated assets way more appealing.

The European Central Bank (ECB), by contrast, finds itself in a predicament. June’s rate hike briefly eased inflationary pressure in the region. Unfortunately, this effect was short-lived. According to Yannis Stournaras, a member of the regulator’s Governing Council, another surge in fuel prices has practically neutralized the ECB’s efforts. Market participants have already prepared themselves for two more raises this year. However, the materialization of this scenario will largely depend on how events unfold in the Middle East.

This week, investors’ attention will be glued to the US Consumer Price Index (CPI) report. The robust labor market has just underscored the resilience of the American economy. The upcoming inflation data could offer further confirmation, weighing on EURUSD.

From a technical standpoint, the pair is now trying to rebound from the recent decline, trading near 1.14000. A descending trendline serves as a strong resistance level on the daily chart, capping any recovery. The Chaikin Oscillator is still in negative territory, suggesting that buying activity is weak and sellers remain in the driver’s seat—even during consolidation.

Consider the following trading strategy:

Sell EURUSD at the current price, with Take profit at 1.13400 and Stop loss at 1.14500.

This forecast is valid from July 13 till July 20, 2026.