EUR/USD Price Forecast: Gets some relief from Russia-Ukraine energy ceasefire

EUR/USD edges up to near 1.1208 on the Russia-Ukraine energy ceasefire announcement.
Heightened French fiscal concerns are likely to keep the Euro under pressure.
The US Dollar ticks down at the start of the US CPI week.

Sagar Dua FXStreet

The Euro (EUR) is marginally higher at around 1.1208 against the US Dollar (USD) during the Asian trading session on Monday. The major currency pair gets slight relief from the announcement of an energy ceasefire between Russia and Ukraine, which has put some pressure on oil prices.

Over the weekend, US President Donald Trump announced an energy ceasefire between Russia and Ukraine through a post on Truth Social.

However, the outlook of the Euro is expected to remain uncertain due to ongoing French fiscal risks amid ballooning interest obligations on government-backed securities.

Meanwhile, the US Dollar (USD) starts the week on a cautious note ahead of United States (US) Consumer Price Index (CPI) data for September, which will be published on Wednesday. As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades subduedly at around 102.20.

The US inflation data is expected to have a significant influence on Federal Reserve's (Fed) interest rate expectations. The Federal Open Market Committee (FOMC) minutes of the September policy meeting, released last week, showed that officials are highly concerned regarding inflation remaining well above the 2% target.

EUR/USD Technical Analysis

In the daily chart, EUR/USD trades at 1.1209, maintaining a bearish near-term tone as spot holds beneath the 20-period Exponential Moving Average (EMA) at 1.1330.

The pair remains pressured after its recent slide, with the oversold 14-period Relative Strength Index (RSI) around 27 hinting that while downside momentum is stretched, sellers still dominate while price stays capped under the daily EMA.

On the topside, initial resistance is located at the 20-day EMA near 1.1330, and a daily close above this barrier would be needed to ease the current downward pressure and signal a more sustained correction. Looking down, the pair could witness a fresh downside leg if it fails to hold the one-year low at 1.1161.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Economic Indicator

Consumer Price Index (YoY)

Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as The Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The YoY reading compares the prices of goods in the reference month to the same month a year earlier.The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.

Why it matters to traders?

The US Federal Reserve (Fed) has a dual mandate of maintaining price stability and maximum employment. According to such mandate, inflation should be at around 2% YoY and has become the weakest pillar of the central bank’s directive ever since the world suffered a pandemic, which extends to these days. Price pressures keep rising amid supply-chain issues and bottlenecks, with the Consumer Price Index (CPI) hanging at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain an aggressive stance in the foreseeable future.

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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