EUR/USD Forecast: seems poised to resume bullish trajectory, US CPI in focus

The US Dollar came under some renewed selling pressure on Thursday following the release of dismal US PPI print, helping the EUR/USD pair to recover from the 1.1700 neighborhood. The greenback extended overnight slide amid intensifying war of words between the US and N. Korea. Markets now braced for a closely watched consumer inflation figures, due for release later during the NA session. Signs of stubbornly low inflationary pressure in the US would be enough to convince investors that the Fed would refrain from raising interest rates further and should continue weighing on the greenback.

From a technical perspective, the pair rebounded from 50% Fibonacci retracement level of its up-move from 1.1479 to 1.1910 and has also cleared a short-term descending trend-line resistance, clearly suggesting potential for additional near-term up-move. 

With short-term technical indicators holding comfortably in positive territory, the pair remains poised to reclaim the 1.1800 mark. The said handle also coincided with 23.6% Fibonacci retracement level and hence, a follow through buying interest might continue lifting the pair towards 1.1880 horizontal resistance, back closer to 26-month highs touched in the previous week. 

On the flip side, 38.2% Fibonacci retracement level near the 1.1750-45 region now seems to protect immediate downside, below which the pair is likely to drift back towards retesting the 1.1700 support. On a convincing break below the mentioned supports, the pair is likely to accelerate the fall towards its next support near the 1.1615-10 zone with some intermediate support at 61.8% Fibonacci retracement level support near 1.1645 level.

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