This week's trading session started with the range bound moves with almost no high-risk event scheduled on Monday. However, there were a couple of important risk events lined up during today's New York session. The first in line was the US Consumer Price Index data, which was released by the US Bureau of Labor Statistics. The forecast was of a 0.3 percent rise in the CPI in June on a seasonally adjusted basis. The outcome was as expected, as the Consumer Price Index for All Urban Consumers increased by 0.3%. Moreover, the year-over-year change CPI came in at 2.1% vs 2.1% previous. This was also in line with the forecasts. The only disappointment from the market's perspective was that the index for all items less food and energy increased by 0.1%, missing the forecast of 0.3%. Similarly, the core CPI year-over-year change came in at 1.9% vs 2% expected.
The data was certainly on the positive side for the US dollar bulls, as the inflation remained anchored in line with the fed's expectation. This means that the Fed might continue with their taper plan, and inflation would not be a concern in the short term for the fed officials.
US Existing Home Sales Data
The next in line was the US Existing Home Sales data, which was released by the National Association of Realtors. The forecast was slated for a rise of 2% in June. The outcome exceeded the expectation, as the US Existing Home Sales saw a jump of 2.6% to a seasonally adjusted annual rate of 5.04 million in June from an upwardly-revised 4.91 million in May, according to the report published. This again boosted the US dollar, as the pairs like EURUSD, GBPUSD and AUDUSD traded lower after the data release.
Technically, the EURUSD pair fell below the 1.3500 level, and more importantly the pair also managed to pierce the 1.3480 swing support level. The pair traded as low as 1.3458 as of writing, and it looks like the pair is set to test the 1.3440 support level in the short term. However, there is a cluster of support levels around the mentioned support area, which is likely to act as a barrier for the Euro sellers in the medium term. However, if the EURUSD pair closes below the 1.35 level, then the bearish pressure might increase moving ahead.