EUR/USD approaches 1.0900 resistance ahead of critical US CPI data

EUR/USD traded at 1.0885, up 0.15%, as the pair approaches a crucial technical zone ahead of Wednesday's US Consumer Price Index report. The euro found support near 1.0850 while testing the psychologically important 1.0900 resistance level. Markets are pricing in a 65% probability of steady inflation at 3.1% year-over-year, which could influence Federal Reserve rate decisions. A break above 1.0900 could signal continuation toward 1.0950, while failure might trigger a retreat to 1.0820 support. The Dollar Index futures showed weakness at 104.20, down 0.2%, providing additional tailwind for the euro. Technical indicators including the RSI at 58 suggest room for further upside without being overbought. Traders are positioning cautiously as the CPI data could spark significant volatility, particularly if inflation surprises either direction.