EUR/USD Current Price: 1.1846

  • US August core inflation beat expectations providing support to the greenback.
  • AstraZeneca and Oxford announce they resumed testing of their coronavirus vaccine.
  • EUR/USD bullish potential limited needs to recover above 1.1915.

The EUR/USD pair posted a modest advance last Friday, ending the week unchanged around 1.1840.  Weaker demand for the dollar was the main driver of the pair, as the American currency remained out of the market’s radar throughout the first half of the day. It recovered some poise in the final trading session of the week, following the release of upbeat US inflation. According to the official report, core annual inflation picked up in August, improving to 1.7% from 1.6% in the previous month. German inflation, on the other hand, was confirmed at -0.1% YoY. The market’s mood, however, remained sour, with equities pulling off their highs ahead of the close to end the day mixed.

Over the weekend, AstraZeneca and Oxford announced they would resume their coronavirus-vaccine tests, which were interrupted due to possible side effects in one participant. The news could bring back risk-on, although temporarily. This Monday, the EU will publish July Industrial Production, seen up 10% in the month, while the US macroeconomic calendar will remain empty.

EUR/USD short-term technical outlook

The EUR/USD pair is trading around the 38.2% retracement of its September decline, neutral-to-bullish in the daily chart. It’s stuck around a flat 20 DMA but holding above the larger ones, while technical indicators are modestly advancing above their midlines. In the shorter-term, and according to the 4-hour chart, however, the bullish potential is limited. The pair is hovering around directionless moving averages, the Momentum indicator turned lower within positive territory, while the RSI indicator consolidates within neutral levels. The pair could become more interesting for bulls once above 1.1915, the 61.8% retracement of the mentioned decline.

Support levels: 1.1810 1.1760 1.1725

Resistance levels: 1.1860 1.1915 1.1950  

View Live Chart for the EUR/USD

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