(MENAFN- Daily Forex) Bullish view

• Buy the EUR/USD pair and set a take-profit at 1.1750.
• Add a stop-loss at 1.1570.
• Timeline: 1-2 days.

Bearish view

• Sell the EUR/USD pair and set a take-profit at 1.1570.
• Add a stop-loss at 1.1750.

The EUR/USD exchange rate drifted upward after the US Consumer price Index data. It rose to a high of 1.1695 on Wednesday, up by over 2.45% from the lowest point on August 1, and is hovering slightly below the year-to-date high of 1830 Reserve interest rate cut odds rise

The EUR/USD pair has been in a strong bull run in the past few months, moving from a low of 1.0175. Data released on Tuesday showed that the headline consumer price index (CPI) dropped from 0.3% in June to 0.2% in July.

The CPI remained unchanged at 2.7% on an annualized basis, missing the average estimate of 2.8. Further data showed that the core consumer inflation rose from 2.9% to 3.1%, its highest level in months.

Most importantly, goods inflation rose by a smaller margin than expected, a sign that Trump's tariffs are having a minimal impact on consumer prices. Still, most analysts believe that these numbers will give the Federal Reserve the flexibility it needs to start cutting interest rates in September,

Some Federal Reserve officials have already started talking about interest rate cuts. In a statement, Thomas Barkin of Richmond Fed, hinted that he would support a cut in the meeting.

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Other officials like Christopher Waller, Neel Kashkari, and Michele Bowman have suggested that a rate cut would be necessary after the recent nonfarm payrolls (NFP) data.

A report by the Bureau of Labor Statistics (BLS) showed that the economy created just 73,000 jobs in July as the unemployment rate rose to 4.2%. The BLS also downgraded its June and May jobs numbers to an average of 35,000 a month.

The top catalyst for the EUR/USD pair will be the upcoming German and Spanish consumer inflation data.

EURUSD Chart by TradingViewEUR/USD Technical Analysis

The EUR/USD exchange rate has moved sideways in the past few days. It was trading at 1.1670, higher than this month's low of 1.1395.

The pair has remained above the 50-day and 100-day Exponential Moving Averages (EMA). It has also formed a bullish pennant pattern, which is made up of a vertical line and a symmetrical triangle.

The pair has also formed an inverse head-and-shoulders pattern, a common continuation sign. Therefore, the most likely scenario is where it continues rising and moves to the key resistance level at 1.1830.

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