EUR/USD steadies above 1.1550, looks to close the week modestly higher

• Lack of fundamental drivers paves the way for a correction on Friday.
• US Dollar Index stays calm above 95.
• EU's Juncker continues to criticise Italy.

The EUR/USD pair touched its highest level of the month at 1.1610 earlier in the day but struggled to preserve its momentum as the greenback took advantage of the lack of fundamental drivers and started to retrace its losses. As of writing, the pair was losing 0.28% on the day at 1.1560. Despite today's modest fall, however, the pair remains on track to record weekly gains after closing the previous two weeks in the red.

The data released by the Destatis on Friday showed that the inflation in Germany, measured by the CPI, stayed unchanged at 0.4% and 2.3% in September on a monthly and yearly basis, respectively, to match market expectations. Additionally, the Eurostat reported that industrial production in the euro area expanded 1% in September following August's 0.7% contraction.

Later in the day, the U.S. Bureau of Labor Statistics reported that import prices in the U.S. increased by 0.5% from August to September to surpass the analysts' estimate of 0.2%. Finally, in its preliminary October reading, the UoM's Consumer Confidence Index eased slightly to 99 from 100.1 in September. The US Dollar Index, which tracks the greenback against a basket of six currencies, advanced to 95.37 in the early trading hours of the NA session and has gone into a consolidation phase. At the moment, the DXY is up 0.2% on the day at 95.22.

On Italy-related headlines, European Commission President Jean-Claude Juncker argued that Italy was not keeping its word on the budget in an interview with Le Monde. Responding to this comment, "Juncker should stop insulting Italy and think more about Luxembourg's fiscal paradise," said Italy's Deputy Prime Minister Matteo Salvini.

Technical outlook via FXStreet Chief Analyst Valeria Bednarik

The pair's weekly high coincides with the 50% retracement of the previous weekly decline and has now stabilized below the 38.2% retracement of the same decline, which keeps indicating that the upward potential is well limited. In the weekly chart, the pair is resting around a bullish 100 SMA, while the recovery stalled below a still bearish 20 SMA. Technical indicators in the mentioned chart remain within negative levels but lack clear directional strength. All in one, more slides could be expected.

In the daily chart, the 20 and 100 DMA converge with the mentioned Fibonacci resistance that contained the weekly advance, while the 200 DMA maintains its bearish slope some 300 pips above the current level. Technical indicators in the same chart have resumed their declines within negative readings and after correcting oversold conditions, also indicating that the risk is skewed to the downside. 1.1460 is a strong static support area, and if pierced ahead, the pair can retest 1.1400, while below this last, 1.1320/40 is the next probable bearish target. An immediate resistance comes in the 1.1620 area, but the pair needs to firm up beyond 1.1660 to actually have chances to extend d its recovery toward the 1.1730 price zone.