- European stocks up in data-light session yields modestly down.
- US April inflation figures to be out ahead of Wall Street's opening.
The EUR/USD pair trades where it left in the past American session, uneventfully around the 1.1860 region. The greenback has paused its latest upward momentum that extended for over three weeks, partially due to soaring oil prices, partially ahead of today's US inflation data that could give some hints on whether the Fed could raise rates next June or not. Dollar's rally is also overstretched, and market players need now some solid background to continue in that path.
Some European countries are on holiday's today, leaving the calendar empty in the region, but local share markets are strongly up, following Wall Street's lead, as Treasury yields modestly retreat from fresh highs.
As said, US inflation is the key for today, although if the figures come in-line with expectations, little action should be expected. Despite expected to advance, yearly inflation is expected at 2.2%, below the 2.3% peak seen earlier this year. Furthermore, after the Fed added the "symmetric" concept to inflation and hinted tolerance, the market is unclear on how high it needs to be to be a trigger, or how low should it be to become a concern.
The EUR /USD pair 4 hours chart shows that it's currently pressuring its 20 SMA from below, which has been acting as a dynamic resistance ever since April 19th, while technical indicators have extended their recoveries within negative territory, nearing their midlines. Overall, the recovery could continue as corrective if the pair advances above 1.1910, the immediate resistance, followed by 1.1950 and 1.2000. The main short-term support now is 1.1840, followed by 1.1800 and 1.1770.
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