DBG Markets: Market Report for Sep 11, 2025

US PPI Soften, Focus on CPI and ECB; Whats Next on EURUSD

The U.S. Producer Price Index (PPI) unexpectedly eased in August, coming in softer than the markets expected small uptick.

This reinforced expectations that the Federal Reserve will cut rates by 25bps at its September meeting, while some traders now speculate on the possibility of a faster pace of easing if upcoming data confirms disinflation momentum.

Following the release, U.S. Treasury yields dipped—particularly on the 10-year—while the U.S. Dollar Index (DXY) remained locked in its recent consolidation. Attention now turns to tonights Consumer Price Index (CPI), which is seen as the key catalyst for the next move in the dollar.

CPI Set to Shape Feds Path

Consensus expects headline CPI to rise 0.3% MoM and 2.9% YoY, with core CPI at 0.3% MoM and 3.1% YoY.

· Downside surprise: Would likely increase bets on deeper or faster cuts, pressuring the dollar and supporting equities and gold.

· Upside surprise: Could challenge the dovish narrative, push yields higher, and spark a short-term rebound in the dollar—potentially weighing on equities.

With a September cut already largely priced in, the real debate is about the pace and depth of easing beyond September. Tonights CPI will be critical in shaping those expectations.

ECB in the Spotlight

The European Central Bank (ECB) policy meeting later today adds another layer of catalyst to the market. While no change in interest rates is expected, markets are looking for President Christine Lagardes guidance on the inflation-growth trade-off in the eurozone.

· Hawkish Risk: If Lagarde emphasizes sticky inflation in services and wage pressures, the ECB could signal a longer period of restrictive policy, lending short-term support to the euro.

· Dovish Risk: Conversely, if the ECB highlights weak growth dynamics, rising risks of stagnation, and potential policy easing down the line, the euro could come under renewed pressure.

The tone of the press conference will likely determine whether the euro sustains its recent consolidation or breaks into a new trend.

Whats Next on EURUSD & EURJPY？

EURUSD Technical Insights

With the U.S. Dollar Index still trapped in the 97.5–98.5 range, EURUSD—being its largest component—has also remained range-bound for more than a month. The pair has repeatedly tested the 1.1730–1.1800 resistance zone, where the rally that started in February 2025 has now stalled.

EUR/USD, Daily Chart

EUR/USD, 4-Hour Chart

Over EURUSD, the pair continues to face resistance within the 1.1730–1.1800 zone, with the rally that started in February 2025 now pausing and turning into a sideways trend.

Technically, this consolidation could lead to a breakout that translates into either a bearish reversal or a bullish continuation.

For now, upside resistance is seen at 1.1730–1.1800, while downside support lies at 1.1600. A breakout above the 1.1800 psychological level would signal a renewed bull run, while a break below 1.1600 would confirm a bearish reversal.

Until then, the pair remains in consolidation, waiting for catalysts—most likely from tonights U.S. CPI data and the ECB policy outlook—to provide direction.

EURJPY Technical Insights

EUR/JPY, Daily Chart

Over EURJPY, the pair is also facing resistance near the 173.30–174.00 zone. Notably, this is the major resistance level last seen in July 2024, when EURJPY marked a high around 174.00 before a sharp selloff took the pair down to 155.00 within just a month.

EUR/JPY, 4-Hour Chart

Meanwhile, in the short-term trend, the recent ascending triangle pattern is worth watching. A breakout from this pattern could lead to a renewed trend.

However, for now, a breakdown appears more likely, which could trigger strong short-selling momentum.

Bottom Line: Mixed Market Dynamics Ahead

While the ECB meeting tonight is an important driver for euro pairs, it may not be the only factor. Unless the ECB turns sharply dovish, EURUSD and EURJPY are likely to be influenced by broader market dynamics, especially with the Fed, BoJ, and ECB all holding key meetings in September.

Both pairs are now sitting near critical levels, and a clearer market trend is likely to emerge once investors digest the policy outlook from these three central banks and adjust capital flows accordingly. Still, both the pairs are mostly likely to welcome a broad trend in September.