Inflation Data to Drive EURUSD and GBPUSD This Week
Last week’s market action confirmed that geopolitical tensions and inflation data remain key drivers for major currency pairs. The US Dollar continues to dominate price action as traders assess central bank policy expectations and upcoming Consumer Price Index Report (CPI) releases. With critical economic events and important technical levels in focus, this week’s article breaks down what’s influencing EURUSD e GBPUSD this week and where potential trading opportunities may emerge.
EURUSD Outlook: Geopolitical Risks and CPI in Focus
EURUSD closed last week’s trading session lower amid geopolitical tensions between the US and Iran. US President Trump’s announcement that the US will not strike Iran provided some market relief; however, investors and traders continue to weigh the risk of military action. This uncertainty has supported a stronger US Dollar against all major currencies.
The US CPI remained unchanged for December 2025, adding pressure on the Federal Reserve (Fed) not to reduce interest rates at the upcoming meeting and further strengthening the US Dollar.
For this week, traders and investors will mainly focus on the overloaded economic calendar from both the US and the EU. The main catalyst for the next price action will be CPI data from both regions. Officials from the Fed and the European Central Bank (ECB) are also due to deliver speeches during the week, preparing markets for the next central bank meetings.
EURUSD Position Sentiment and Key Economic Events This Week
On the economic calendar, Monday features the European Core Harmonized Index of Consumer Prices, expected to remain unchanged at 2.3%. On Thursday, US Core Personal Consumption Expenditures are expected to remain unchanged at 4.3%. On Friday, European Services Purchasing Managers Index (PMI) is expected to remain unchanged at 52.7, while the US Services PMI is expected to remain unchanged at 52.5.
Technically, the pair is positive after last week’s close above 38.2% at 1.1598. Traders’ short positions are targeting profits at 1.1500, while new long positions were opened at 1.1591, targeting profits above 1.1700.
Current position sentiment stands at BUY 50% – SELL 50%.
EURUSD chart, January 18th, 2026. Source: TenTrade.com
GBPUSD Outlook: Geopolitical Tensions and CPI Keep USD Strong
GBPUSD closed last week’s trading session lower due to geopolitical tensions between the US and Iran. President Trump’s announcement that the US will not strike Iran provided some relief to markets; however, ongoing concerns over potential military action have supported the US Dollar against all major currencies.
The US CPI remained unchanged for December 2025, increasing pressure on the Fed to maintain current interest rates at the upcoming meeting and further supporting the US Dollar.
This week, traders and investors will mainly focus on the overloaded economic calendar from both the US and the UK. As always, CPI data from both sides will be the main catalyst for the next price action. Fed and BOE officials are scheduled to deliver speeches throughout the week, preparing markets for upcoming central bank meetings.
GBPUSD Position Sentiment and Key Economic Events This Week
On the economic calendar, Tuesday brings the UK ILO Unemployment Rate, expected to edge lower to 5%. On Wednesday, the UK CPI is expected to rise to 3.3%. On Thursday, US Core Personal Consumption Expenditures are expected to remain unchanged at 4.3%. On Friday, UK Retail Sales are expected to remain unchanged at -0.1%. The UK Services PMI is expected to remain unchanged at 51.4, while the US Services PMI is expected to remain unchanged at 52.5.
Technically the pair is neutral after last week’s close below 38.2% at 1.3374. Short positions are targeting profits at 1.3300, while long positions are targeting profits at 1.3600.
Current position sentiment at BUY 40% – SELL 60%.
GBPUSD chart, January 19th, 2026. Source: TenTrade.com
Key Takeaways
Geopolitical tensions in Latin America are supporting US Dollar demand.
Softer-than-expected European and US data are influencing EURUSD and GBPUSD movements.
EURUSD remains under pressure, with ECB rate cut expectations weighing on the Euro.
GBPUSD shows downside risk, but technical levels suggest potential stabilisation.
US CPI and other economic releases will likely drive price action this week.
For more detailed economic calendar events please visit our live economic calendar on:
https://tentrade.com/economic-calendar/
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