EUR/USD back to 1.1850 ahead of US inflation on Thursday

• The US inflation will be closely watched by investors on Thursday. 
• USD is trading mixed as the United States pulling out from the Iran nuclear deal can lead to renewed geopolitical tensions, especially with China and Russia.  

The EUR/USD is trading at around 1.1850 virtually unchanged on Wednesday. 

In the European session, the EUR/USD found a low at 1.1820 after which bulls took control and pushed the pair close to the 1.1900 handle. In the US session, the single currency pulled back and is currently trading around the 1.1850 level.

The US Dollar Index (DXY), which measures the greenback relative to a basket of currencies, is trading sideways coiling around the 93.00 psychological mark. The recent news on Tuesday of the US pulling out of the Iran nuclear deal can potentially affect negatively the USD as the decision can renew geopolitical conflicts with China and Russia. The two countries are also parties in the agreement and the US diplomatic ties with the two nations are already rather shaky.

There is little on the Eurozone macroeconomic data calendar this week and EUR/USD will take its cues from USD sentiment, the US Consumer Price Index (CPI) on Thursday and the speech from the European Central Bank’s President, Mario Draghi on Friday. 

The US inflation of Thursday will be closely scrutinized by investors. Market participants are expecting higher inflation data which would justify that the Federal Reserve hikes rates.  

EUR/USD 4-hour chart 

The pair is evolving in a bear trend and immediate support is seen at 1.1850 followed by 1.1820 (low of the day) and then 1.1800 handle. Further down 1.1717 swing low should provide support. To the upside, bulls will target the 1.1900 handle followed by the 1.2000 handle.