EUR/USD consolidates above 1.1800 as trades await Eurozone CPI and US data

EUR/USD lacks follow-through buying as a softer risk tone lends support to the safe-haven USD.
The divergent ECB-Fed policy outlooks might continue to act as a tailwind for the currency pair.
Traders now look forward to the flash Eurozone CPI print for some impetus ahead of the US data.

Haresh Menghani FXStreet

The EUR/USD pair struggles to capitalize on the previous day's modest bounce from the 1.1780-1.1775 area, or over a one-week low, and oscillates in a narrow band during the Asian session on Wednesday. Spot prices currently trade around the 1.1815 zone, nearly unchanged for the day, as traders keenly await the release of the flash Eurozone consumer inflation figures.

The preliminary estimate is expected to show that the Harmonized Index of Consumer Prices (HICP) fell to the 1.7% YoY rate in January from 1.9% in the previous month, while the core gauge is seen holding steady at 2.3% YoY. The European Central Bank (ECB) views this as a temporary deviation, suggesting no immediate adjustments to monetary policy. Nevertheless, the data could influence the shared currency and provide some impetus to the EUR/USD pair.

Later during the North American session, traders will take cues from the US ADP report on private-sector employment and the US ISM Services PMI, which might further contribute to producing short-term opportunities. The immediate market reaction to the releases, however, is more likely to be limited as the focus will remain glued to the highly anticipated ECB policy meeting on Thursday. The outcome will play a key role in driving the EUR/USD pair in the near term.

In the meantime, a slight deterioration in the global risk sentiment offers some support to the safe-haven US Dollar (USD) and acts as a headwind for the currency pair. That said, the growing acceptance that the US Federal Reserve (Fed) will cut rates two more times in 2026 could cap the USD and support the EUR/USD pair. This warrants caution before positioning for an extension of the EUR/USD pair's pullback from the highest level since June 2021, touched last week.

Economic Indicator

Harmonized Index of Consumer Prices (YoY)

The Harmonized Index of Consumer Prices (HICP) measures changes in the prices of a representative basket of goods and services in the European Monetary Union. The HICP, released by Eurostat on a monthly basis, is harmonized because the same methodology is used across all member states and their contribution is weighted. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.