- The pair comes under pressure following CPI figures.
- Preliminary CPI figures in Euroland came in at 1.6% YoY.
- Core CPI expected to remain at 1.0% on a yearly basis.
The upside momentum in EUR/USD has eased a tad following the release of flash CPI figures in the euro area, prompting spot to recede to the 1.1400 neighbourhood.
EUR/USD upside capped near 1.1420
Spot saw its up move trimmed around 1.1420 today, shedding some ground after preliminary inflation figures in Euroland came in below expectations for the month of December.
In fact, headline consumer prices are expected to rise at an annualized 1.6% in the last month of 2018 vs. a forecasted gain of 1.8%. In addition, prices stripping food and energy costs are seeing up 1.0% from December 2017.
In the meantime, the pair remains bid in a context of thin trade and the persistent offered tone surrounding the greenback, all ahead of the publication of US Non-farm Payrolls and the speech by Fed’s Powell at the annual meeting of the American Economic Association.
What to look for around EUR/USD
Alternating risk trends continue to be the most relevant driver of the pair in the very near term. In addition, investors keep looking to US-China trade front along with prospects of a potential slowdown in the global economy, particularly exacerbated by recent results in Chinese fundamentals and Apple’s warning on sales. Today’s speech by Chief Powell could unveil further details of the rate path by the Federal Reserve in the coming months.
EUR/USD levels to watch
At the moment, the pair is gaining 0.11% at 1.1405 facing the next up barrier at 1.1420 (high Jan.4) seconded by 1.1478 (100-day SMA) and finally 1.1547 (high Jan.1). On the flip side, a breakdown of 1.1309 (2019 low Jan.2) would target 1.1268 (monthly low Dec.14 2018) en route to 1.1214 (2018 low Nov.12).
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