EUR/USD EXTENDS PULLBACK INTO MIDWEEK

• EUR/USD takes another step lower after Tuesday’s US inflation report. 
• The short-term uptrend is now in doubt but the move down lacks momentum. 
• Analysts at TD Securities are still penciling in June for a Fed rate cut.

EUR/USD continues its steady decline into midweek after the release of higher-than-expected inflation data from the United States (US) reduced the chances of an early interest-rate cut from the Federal Reserve (Fed). 

The pair is trading in the 1.0920s at the time of publication, down from the last major peak in the 1.0980s on Friday. 

Investors have now shifted their expectations away from the possibility of the Fed pressing the button on cutting interest rates in May, more firmly to June.

Since keeping interest rates higher for longer is positive for the US Dollar (USD), as it attracts greater capital inflows, the US Consumer Price Index (CPI) data release has seen the Greenback gain in most pairs, including EUR/USD.