EURUSD on the edge: US inflation and the Middle East influence the market

Rising inflation in the US is pushing the Federal Reserve towards raising interest rates and strengthening the USD. The EURUSD rate currently stands at 1.1735. Find more details in our analysis for 13 May 2026.

EURUSD forecast: key takeaways

• US Producer Price Index (PPI): previously at 0.5%, projected at 0.5%
• US CPI rose to 3.8%, the highest level since May 2023, above the forecast of 3.7%
• EURUSD forecast for 13 May 2026: 1.1835

Fundamental analysis

The EURUSD forecast takes into account that the pair has come under two-pronged pressure: first from US statistics, and then from geopolitics, pulling back from recent highs to the low of 5 May.

Yesterday, US inflation data came in above forecasts: headline CPI rose to 3.8%, the highest level since May 2023, against a forecast of 3.7%, while core CPI increased to 2.8%. Rising inflation dashes hopes for near-term Fed easing, and the market even began to discuss the possibility of another rate hike, which immediately supported the dollar. As a result, the EURUSD pair fell to the 1.1735 area.

Hawkish sentiment at the European Central Bank is also contributing to the situation. Bundesbank President Joachim Nagel stated that the likelihood of rate hikes is growing due to the ongoing conflict in the Middle East. Against that backdrop, the market is already pricing in a 92% probability of such a move at the ECB meeting in June. This creates an interesting fundamental parity, preventing the pair from falling too low.

The fundamental analysis for 13 May 2026 takes into account that the US PPI data will be released today. If these figures, like the CPI, exceed forecasts, pressure on the pair will intensify. However, the main market trigger is geopolitics rather than statistics. News about the progress of US-Iran negotiations and the outcome of the US President’s visit to China will remain the decisive factor.

Technical outlook

On the H4 chart, the EURUSD pair formed an Inverted Hammer reversal pattern near the upper Bollinger Band. At this stage, quotes may form an upward wave following this signal. Since they remain within an ascending channel, the 1.1835 resistance level may be an upside target. A breakout above this level would open the way for the continuation of the uptrend.

At the same time, today’s EURUSD forecast also suggests another scenario. Quotes may continue the downward wave and test the 1.1700 support level. After rebounding, they may continue their upward trajectory.

EURUSD overview

• Asset: EURUSD
• Timeframe: H4 (Intraday)
• Trend: upward
• Key resistance levels: 1.1780 and 1.1835
• Key support levels: 1.1700 and 1.1660

EURUSD trading scenarios for today

Main scenario (Buy Stop)

A breakout and consolidation above the 1.1780 resistance would create conditions for opening long positions.

• Take Profit: 1.1835
• Stop Loss: 1.1750

Alternative scenario (Sell Stop)

A breakout below the support level, with the price consolidating below 1.1700, would indicate stronger selling pressure and a continued correction.

• Take Profit: 1.1660
• Stop Loss: 1.1725

Risk factors

Technical risks to the EURUSD bullish scenario will increase if tensions in the Middle East escalate, energy prices rise, and the US Federal Reserve makes hawkish statements about raising interest rates.

Summary

Rising inflation in the US is prompting the Fed to raise interest rates, while the ECB’s monetary policy is moving in the same direction, which is creating a dual effect on the EURUSD rate. EURUSD technical analysis suggests growth towards 1.1835 after the correction ends.

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