The US inflation data yesterday did not provide any surprise whatsoever and as a result, the market was initially indecisive. However, economists at Commerzbank remain cautious and do not expect a further up-move in EUR/USD.

Some caution might be advisable

“After the EUR/USD rally seen over the past months, the question increasingly arises as to how much scope is still available, in particular, if there is no new momentum due to new developments. Of course, it is possible that EUR/USD might rise a little further but it makes increasing sense to question this move.”

“It cannot be excluded that the Fed might be correct in the end. If future data publications suggest that inflation might be more stubborn EUR/USD might come under increasing downside pressure as the market might then have to adjust its rate expectations. That means that the surprise potential on the downside in EUR/USD is likely to be much higher, suggesting that some caution might be advisable.”