EUR/USD Forecast: Wait-and-see mode ahead of critical inflation data
|EUR/USD Current price: 1.0945
- The focus this week will be on the United States Consumer Price Index.
- Mixed European data fell short of spurring directional movements.
- EUR/USD is technically neutral around 1.0940, bulls need to reconquer 1.1000.
The EUR/USD pair trades uneventfully around its daily opening, trading in the 1.0940 price zone ahead of Wall Street’s opening. The pair struggles for direction, confined to familiar levels since last Wednesday. Speculative interest assessed the previous week's United States (US) employment-related figures, which generally stronger than anticipated. The numbers spurred doubts about when the Federal Reserve (Fed) could proceed with the first rate cut, but in the end, investors maintained bets on a March cut, limiting US Dollar gains.
This week, the focus will be on inflation, as the United States will publish the December Consumer Price Index, foreseen at 3.2% YoY, above the previous 3.1%. The core annual reading, however, is expected at 3.8%, easing from 4% in November.
The macroeconomic calendar has been quite busy during European trading hours, as Germany reported the November Trade Balance, which posted a seasonally adjusted surplus of €20.4 billion, beating expectations. Additionally, Factory Orders increased a modest 0.3% in the same month, below the 1.0% anticipated by market players. The Eurozone unveiled January Sentix Investor Confidence, which resulted in -15.8, while Retail Sales fell 0.3% MoM. The American session will bring no relevant data, although some Fed speakers will be on the wires.
EUR/USD short-term technical outlook
The daily chart for the EUR/USD pair shows it remains pretty much neutral for a fourth consecutive day. The 20 Simple Moving Average (SMA) maintains its bullish slope but acts as dynamic resistance around 1.0970. The longer moving averages, in the meantime, remain directionless, far below the current level, while technical indicators head nowhere around their midlines, reflecting the absence of directional interest.
In the near term, and according to the 4-hour chart, EUR/USD is also neutral. The pair trades around a flat 20 SMA, while a directionless 200 SMA provides intraday support at around 1.0920. Finally, technical indicators are flat around their midlines, in line with the absence of a clear directional interest.
Support levels: 1.0920 1.0885 1.0840
Resistance levels: 1.0970 1.1015 1.1060
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