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    Market participants expect a US Consumer Price Index report, keeping EUR/USD stable around 1.1600.

    by VT Markets
    /
    Oct 23, 2025

    Market Participants Prepare for CPI Release

    Market players are getting ready for the US Consumer Price Index (CPI) release and the Federal Reserve’s monetary policy decision next week. The central bank is likely to lower rates by 25 basis points, bringing the range down to 3.75% – 4%. Meanwhile, the European Central Bank is expected to keep rates steady, with a 98% chance of that happening. The technical outlook for EUR/USD is neutral to bearish, with immediate support at 1.1600. Potential downside targets are at 1.1550 and 1.1500, while resistance levels sit at 1.1656 and 1.1700. Several factors, such as European Central Bank policies, inflation data, and economic conditions, impact the Euro. The Euro is the currency used by 19 European Union countries and is widely traded worldwide, making it the second most traded currency after the US Dollar. In 2022, it represented 31% of all foreign exchange transactions, with an average daily turnover exceeding $2.2 trillion. Currently, the EUR/USD is hovering around 1.1600. This quiet period before the delayed US CPI report is crucial for options traders. The Cboe EuroCurrency Volatility Index (EVZ) has fallen to a multi-week low of 7.2. This indicates that options premiums are relatively inexpensive right now, providing an opportunity to brace for the volatility expected from the inflation data.

    Geopolitical Risks and Safe-Haven Demand

    We should also consider the broader market, where gold is approaching the $4,000 mark. This suggests strong demand for safe-haven assets. A climate of risk aversion could enhance the US dollar’s appeal more than that of the Euro. As a result, even a weak CPI report may not lead to a sustained rally for EUR/USD if geopolitical tensions rise. Create your live VT Markets account and start trading now.

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