BofA sees EUR/USD and USD/JPY vulnerable to today’s CPI data

Bank of America said EUR/USD and USD/JPY are especially exposed to the day’s U.S. CPI release. The bank sees EUR/USD vulnerable to a hotter-than-expected inflation print, citing deteriorating sentiment and momentum, option flow skewing toward puts, and technical signals that favor a further euro downtrend. On the other hand, a softer CPI reading could make bearish USD/JPY positioning attractive, as BofA’s technical matrix shows the pair’s uptrend weakening and valuation signals suggest it may be due for mean reversion. The note implies the inflation report could act as a near-term catalyst for the dollar and potentially drive volatility across major FX pairs.