FXStreet (Łódź) - The eFXnews team remark that in the opinion of Credit Agricole team of analysts US June inflation data, due out on Tuesday, could cause a USD pull-back.
"With consensus looking for a largely stable outcome, any meaningful divergence (in either direction) has potential to move USD."
"However given the recent hawkish shift in Fed expectations, our view is that USD is more vulnerable to weakness from a negative (or stable) inflation surprise rather than strength on a positive surprise."
"Indeed with Fed Chairwoman Yellen clear on the FOMC’s intentions to keep policy accommodative well after its QE-exit is finished, USD bulls may have gotten too far ahead of themselves with this week’s inflation just the trigger needed to prompt a mild EUR/USD squeeze."
"Provided no further intensification risk aversion (a clear risk in the current environment), we look for EUR/USD to bounce higher to resistance at 1.3590."
"Further ahead, we remain constructive on EUR/USD believing capital inflows will dominate any negative carry influence."
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