US CPI Preview – Potential Reactions and Major Forex Pairs Overview
By Elior Manier - 14 July 2025
Market Context
The upcoming Consumer Price Index (CPI) inflation report for July 15 has generated significant anticipation in the markets. Following a decline in the Dollar Index to 96.50 on July 1, positive job reports and a resurgence in the tech sector, particularly driven by AI advancements, have pushed the USD back to around 98.00. The Nasdaq and S&P 500 are nearing record highs, while the Dow Jones lags behind. Bitcoin has also surged to approximately $123,200, and NVIDIA's market cap has surpassed $4 trillion.
Expectations for the July CPI Report
Analysts expect a modest increase in both Headline and Core CPI data, projected at +0.3% month-over-month. This would result in a Headline CPI of 2.4% year-over-year and a Core CPI of 2.8% year-over-year. The Core CPI, which excludes volatile food and energy prices, is particularly important as it reflects persistent inflation in services, a key concern for the Federal Reserve. The report will also reflect the impact of rising oil prices due to geopolitical tensions, particularly the Israel-Iran conflict, which may have influenced food prices.
Potential Market Reactions
Market reactions to the CPI data are expected to be unpredictable due to the current market climate. A significant beat (over +0.1%) could lead to panic, causing equities to retract, a rise in yields, and a strengthening of the USD. Conversely, a miss could result in a decline in the USD, a rally in stock indices, and falling yields. A flat reading may lead to minor fluctuations in the USD and equities, with expectations for future rate cuts being adjusted.
Technical Outlook for Major Forex Pairs
EUR/USD
The EUR/USD has formed a downward channel since July 1, with key support levels at 1.1650 and resistance at 1.1830.
GBP/USD
The GBP/USD has seen a strong retraction from its July highs, with critical support at 1.34. A break below this level could accelerate the selloff.
USD/CAD
The USD/CAD is hovering above the 1.37 level, with support at 1.3675 and resistance at 1.38.
USD/JPY
The USD/JPY is testing the extremes of its range, with further analysis recommended for detailed insights.
USD/CHF
The USD/CHF has rebounded from 14-year lows, trading within a tight range, with immediate resistance at 0.80.
NZD/USD
The NZD/USD is showing bearish signs, trading below the 0.60 psychological level, with support at 0.5930.
AUD/USD
The AUD/USD is forming a double top, with immediate support at 0.6550 and resistance at 0.6570 to 0.6580.