US PPI Overview

The United States (US) Producer Price Index (PPI) data for January is due for release today at 13:30 GMT.

The Bureau of Labor Statistics (BLS) is expected to show that inflation at the factory level grew at an annualized pace of 2.6%, slower than 3% in December. Month-on-month headline PPI is estimated to have risen at a moderate pace of 0.3% against the previous reading of 0.5%.

The core PPI – which excludes volatile food and energy items – is expected to arrive lower at 3% Year-on-Year (YoY) from the prior release of 3.3%. On a monthly basis, the core PPI is seen rising moderately by 0.3% against the former reading of 0.7%.

Investors will pay close attention to the US PPI data to get fresh cues on the current state of inflation. The impact of the producer inflation data could be significant for the Federal Reserve’s (Fed) monetary policy outlook, as several officials have advocated holding interest rates steady in the near term in their latest commentaries, citing upside inflation risks.

On Thursday, Chicago Fed President Austan Goolsbee signaled support for several interest rate cuts this year, but cautioned against front-loading them, as inflation remains above the 2% target. “Rates can come down, but don't want to front-load before inflation eases,” Goolsebee said in an interview with Fox News.

How could US PPI data affect EUR/USD?     

EUR/USD trades sideways at around 1.1800 at the press time. The pair consolidates near the 20-day Exponential Moving Average, which has flattened around 1.1810, signaling a loss of directional conviction after the prior advance. Price action has stalled under the recent 1.19 area, while the 14-day Relative Strength Index (RSI) has been trading inside the 40.00-60.00 range, indicating neutral momentum. Taken together, the evidence points to a broadly neutral near-term bias.

Immediate support emerges at the February 19 low of 1.1742, followed by more substantial downside risk toward the January 22 low of 1.1670. On the topside, initial resistance stands at 1.1860, ahead of the recent swing high in the 1.1915 region.

(The technical analysis of this story was written with the help of an AI tool.)