EUR/USD heading for 1.09 as Greenback recedes after US CPI inflation miss

• The EUR/USD has climbed almost 200 pips on Tuesday.
• Broader markets have flipped the risk appetite switch to 'on'.
• US CPI missed forecasts, increasing investor bets that rates could come back down sooner.

The EUR/USD is climbing on Tuesday, rising over 1.8% from bottom to top as the Euro (EUR) finds a firm bid against the US Dollar (USD).

US CPI inflation softens to 3.2% vs. 3.3% forecast

US Consumer Price Index (CPI) inflation broadly came in below expectations, giving investors hope that price growth is cooling enough in the US domestic economy to push the Federal Reserve (Fed) towards a rate cut cycle sooner rather than later.

Month-over-month headline US CPI in October printed at a flat 0.0%, declining from September's 0.4% and missing the median market forecast of 0.1%. Annualized inflation for the year into October also missed the mark, printing at 3.2% against the previous period's 3.7% and coming in below the forecast 3.3%.

Pan-EU Industrial Production for September is expected to come in on the downside early Wednesday, forecast to decline to -0.7% against the previous month's 0.6%.

US data is set to rule the charts heading into the mid-week with US Producer Price Index (PPI) and Retail Sales on the data docket for Wednesday.

The headline US PPI Core numbers for October are expected to hold steady for the year into October, forecast to print steady at 2.7%.

Meanwhile, Retail Sales for October are expected to pull back sharply, forecast to come in at -0.3% compared to September's 0.7%.

EUR/USD Technical Outlook

The Euro's Tuesday rally has sent the EUR/USD well above the 200-day Simple Moving Average (SMA), cracking the long-term moving average near the 1.0800 handle and easily clearing the technical barrier.

The pair is trading just south of the 1.0900 level after gaining over 1.8% from the day's lows near 1.0700.

The EUR/USD's recent lift from October's early low bids near 1.0450 has seen price action shear both the 200- and 50-day SMAs. The bearish-stacked moving averages are set for a bullish cross if markets can keep the risk bid on-balance.

EUR/USD Daily Chart

EUR/USD Technical Level