EUR/USD Forecast: Hammer Candle Signals Potential Rebound Ahead of US CPI Data

Key Facts

1EUR/USD recorded its biggest drop since July last year, ending the week at 1.1615.

2A hammer candle has formed on the chart, technically pointing to a potential bullish rebound.

3The pair retreated significantly from its year-to-date high of 1.2088 due to a flight to safety into the US dollar.

The EUR/USD pair recently recorded its most significant weekly decline since July of last year, closing at the 1.1615 level. This sharp retreat followed a flight to safety that bolstered the US dollar, pulling the pair down from its year-to-date high of 1.2088. However, technical analysts have identified a "hammer" candle on the charts, which often signals a potential bullish reversal. Traders are now closely monitoring this technical setup as the market prepares for the release of the upcoming US Consumer Price Index (CPI) data. While the recent trend has been predominantly bearish, the hammer formation suggests a possible short-term bounce depending on the inflation figures. The pair's immediate trajectory remains highly sensitive to both these technical signals and fundamental shifts in US economic policy.