EUR/USD Forecast: bears losing ground to bulls, but US CPI in the way
|- US yearly inflation is expected to remain unchanged at 1.8% for a third consecutive month.
- Sentiment, through equities, keeps taking its toll on majors.
The EUR/USD pair continues trading uneventfully, now around 1.2330, as investors are waiting for fresh data to take decisions. The European macroeconomic calendar had nothing to offer so far today, with attention mostly centered on the upcoming US February inflation readings. Inflation is expected to have advanced modestly during the month, seen up just by 0.2%. The core yearly figure is expected to remain unchanged at 1.8% for a third consecutive month, which will be a bit discouraging, but not enough to trigger a dollar's sell-off. Higher-than-expected inflation, on the other hand, could give the greenback a nice boost, particularly if market's mood, in the form of US equities, improves. Asian and European indexes in the meantime, hover above their opening levels, with limited momentum but anyway positive, shrugging off the sour tone of Wall Street at the beginning of the week.
The pair is technically neutral according to the 4 hours chart, as it's trapped between directionless moving averages, and hovering around the 38.2% retracement of the last two weeks' rally around 1.2340. Technical indicators in the mentioned time frame have settled around their mid-lines, lacking directional strength. The immediate support from the current level is the 1.2300 region, although a more relevant one comes at 1.2265, where it bottomed last week and has the 61.8% retracement of the mentioned rally. To the upside, the pair has been meeting selling interest in the 1.2340/50 region, but it would take a break above 1.2380, the next Fibonacci resistance, to favor additional advances towards the 1.2420/40 region.
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