• EUR/USD rallied on a weak US Dollar and ECB hawkish commentary.
• Federal Reserve Chair Jerome Powell’s speech on Tuesday did not provide any guidance ahead of the US CPI report.
• EUR/USD Price Analysis: A break/close above 1.0770 would pave the way to test 1.0800

The Euro (EUR) resumed its uptrend vs. the US Dollar (USD) and rose to an eight-month new high around 1.0776, ahead of the release of the Consumer Price Index (CPI) in the United States (US), which is foreseen to slow down. Hence the EUR/USD is trading at 1.0759 after hitting a daily low of 1.0725.

Euro climbed on hawkish ECB commentary and expectations that US inflation would ease

Wall Street continues its rally ahead of the release of the US CPI report. The lack of US economic data releases and an irrelevant speech by the US Federal Reserve (Fed) Chair Jerome Powell on Tuesday left the EUR/USD adrift to speculations that US inflation would ease, which could pave the way for a less aggressive Fed. Consequently, the EUR/USD rose steadily.

Aside from this, the EUR/USD got a lift courtesy of several European Central Bank (ECB) officials’ hawkish commentaries. On Tuesday, ECB’s Schnabel said that “interest rates will still have to rise significantly” and that “inflation will not subside by itself.” On Wednesday, the Bank of France Governor and ECB Governing Council (GC) member Francois Villeroy said that the ECB should reach its terminal rate by the summer.

Later, the Austrian Central Bank Governor Robert Holtzmann added that “rates will have to rise significantly further to reach levels that are sufficiently restrictive to ensure a timely return of inflation to target.” Echoing some of his comments was Olli Rehn, who added that rates need to rise “significantly” in the next couple of meetings and reach restrictive levels to dampen inflation.

Ahead of the week, the US economic docket will feature the Consumer Price Index (CPI) report Thursday, with estimates at 0% MoM while annual based is estimated at 6.5%. The so-called Core CPI is foreseen at 0.3% MoM, a tick higher than the previous month, while yearly, it is estimated to come at 5.7%.

EUR/USD Price Analysis: Technical outlook

From a daily chart perspective, the EUR/USD break of weekly highs around 1.0750s opened the door for testing the June 2022 highs of 1.0773. Once that price level is broken, the EUR/USD might test the 1.0800 figure in the near term. That scenario is backed by the Relative Strength Index (RSI) being in bullish territory and aiming higher, though the Rate of Change (RoC) suggests that volatility remains unchanged. Therefore, the EUR/USD might continue to advance steadily or consolidate.

On the other hand, EUR/USD failure to crack 1.0800 would expose the pair to selling pressure, which could tumble the pair to 1.0750, followed by a test of the January 10 daily low of 1.0711 and the 1.0700 figure.