EUR/USD jumps to 1.0180 highs following soft US CPI data

• The euro bounces at 0.9930 and surges to 1.0180 after US CPI data.
• Cool inflation figures boost hopes of a "dovish pivot' by the Fed.
• The dollar plunges and equity markets soar.

The Euro has skyrocketed from session n lows at 0.9930 area to reach two-month highs at 1.0180 as the release of US inflation figures have sent the Greenback tumbling across the board.

US inflation eases beyond expectations

Consumer inflation increased by 0.4% in October, unchanged from the previous month, against market expectations of a 0.6% reading. The year-on-year figure slowed down to a 7.7% rate, beyond the consensus of 8%, after having risen by 8,2% in September.

The core CPI, which excludes the impact of volatile food and energy prices and is closely observed by the Federal Reserve to assess inflation trends has eased to 0.3% in October, from 0.6% in September, against expectations of a 0.5% increase. Year on year, the core CPI has retreated to 6.3% from 6.6% in September.

These figures suggest that inflation might have started to moderate and provide some leeway for the Federal Reserve to moderate its rate-hiking path over the next months.

With the market extremely sensitive to all news that might determine December’s monetary policy decision, these readings have sent the US Dollar and Treasury bond yields lower and equity markets sharply higher.  

Technical levels to watch