USD outlook hinges on CPI as major pairs consolidate

The US dollar's near-term direction has become increasingly data-dependent as markets await today's crucial CPI release. EUR/USD trades in a tight range near 1.0830, while GBP/USD hovers around 1.2850, both pairs showing limited directional conviction ahead of the inflation data. Market consensus expects core CPI to rise 0.2% monthly, but any deviation could trigger significant volatility. USD/CAD has edged higher to 1.3680, benefiting from softer oil prices weighing on the Canadian dollar. The Federal Reserve's next policy move hinges critically on inflation trends, with persistently high readings likely to support dollar strength through higher-for-longer rate expectations. EUR/GBP remains stable near 0.8435 as both currencies face their own inflation challenges. Traders should prepare for potential breakouts in major pairs, with EUR/USD eyeing 1.0800 support and 1.0860 resistance as key levels.