EUR/USD seesaws around 1.0210 as traders brace for US CPI data
|- Despite a dismal market mood, EUR/USD edges higher in a choppy trading session.
- US, Germany, and Italy’s inflation data are eyed on Wednesday.
- EUR/USD Price Analysis: Range-bound, but US economic data might rock the boat.
The shared currency advances during the New York session, taking advantage of a soft US dollar, which is falling despite rising US bond yields ahead of the release of July’s US inflation figures. In addition, risk-aversion keeps safe-haven peers in the driver’s seat, except for the greenback vs. the euro.
EUR/USD unable to capitalize on overall greenback weakness
The EUR/USD is trading at 1.0216, above its opening price but below its daily high reached during the day at 1.0247. Nevertheless, buyers could not hold the fort or book profits with US economic data looming.
US equities are trading with minimal losses. A light US calendar keeps investors reassessing last week’s US jobs report, with the US Nonfarm payrolls doubling expectations, increasing by 528K. Nevertheless, traders’ focus has shifted towards the Consumer Price Index (CPI). Estimations of headline inflation lie at 8.7% YoY, less than June’s 9.1%, while core-CPI, which excludes food and energy, is expected to rise by 6.1% YoY, vs. 6.2% in last month’s reading.
Across the pond, headlines that Russia’s halted oil pumping through the Druzbha pipeline since Thursday added to an already negative mood, weighing on the EUR/USD. The Russian oil company Transneft blamed problems with payment to UkrTransNafta, the operator of the Ukrainian side.
What to watch
The EU economic calendar will feature inflation figures for Germany and Italy. On the US docket, the US Consumer Price Index (CPI), core CPI, and Fed commentary after inflation data release will give further forward guidance of the Fed’s tightening path.
EUR/USD Price Analysis: Technical outlook
From a daily chart perspective, the EUR/USD is neutral-biased. It has been trading since July 28, above the 20-day EMA, which has been solid support, with sellers unable to break the moving average (MA) decisively. On the flip side, EUR/USD buying pressure remains constrained, with the major exchanging hands within the 1.0096-1.0293 range for at least 21-days.
However, with US data looming, investors should expect some volatility on Wednesday. Break above the top of the range will expose resistance levels at 1.0300, followed by the 50-day EMA at 1.0350 and 1.0400. On the other hand, the EUR/USD first support would be 1.0200. Once cleared, the next support would be the August 3 low at 1.0122, followed by July 27 low at 1.0096.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.