EUR/USD is practically flat awaiting the release of US employment data

EUR/USD is practically flat, trading near 1.1690 at the time of writing, with the bearish bias from December highs intact. Eurozone inflation figures confirmed that price pressures remain weak, which left the pair trading sideways near three-week lows, with investors awaiting the release of key US employment figures.

Data released by Eurostat on Wednesday revealed that the Eurozone Harmonized Index of Consumer Prices (HICP) eased to a 2.0% yearly rate in December, as expected, from 2.1% in November. Likewise, the core HICP slowed down to a 2.3% year-on-year growth, from 2.4% in November, in this case beating expectations of a steady 2.4% reading.

Markets, however, remain calm in spite of the growing geopolitical risks. The US intervention in Venezuela is not triggering major government changes in the country, and US President Donald Trump has announced a $2 billion deal to export Venezuelan Oil to the US.

The main focus today remains on the release of the US JOLTS Job Openings data and the ADP Employment report. These figures will set the tone for Friday's key US Nonfarm Payrolls (NFP) report, and are expected to shed some light on the US Federal Reserve's (Fed) monetary policy plans.

Daily Digest Market Movers: Markets calm awaiting key US data

• The EUR/USD is moving within a tight range on Wednesday, with investors bidding their time ahead of the release of a string of US employment indicators that might help assess the scope of the Fed's monetary easing cycle.
• Data from Germany released earlier on Wednesday revealed that Retail Sales declined 0.6% in November, following a 0.3% drop in October, against market expectations of a 0.2% gain. Year-on-year, retail consumption grew 1.1% after a 0.9% rise in October.
• These figures come after a weaker-than-expected German Harmonized Index of Consumer Prices (HICP), which eased to a 2.0% year-on-year rate in December, from 2.6% in November, below the market consensus of 2.2%.
• Furthermore Eurozone's S&P Services PMI for December was revised down to 52.4 from the previously restimated 52.6 reading, and from 53.6 in November.
• In the US, on Wednesday, the ADP Employment report is expected to show a 47,000 increase in net employment in December, which would offset the 32,000 decline seen in November.
• Also on Wednesday, the US Bureau of Labor Statistics will release November's JOLTS Job Openings, which are seen easing to 7.6 million from 7.67 million in October.
• Investors will also be attentive to the US ISM Services PMI, which is expected to show a 52.3 reading in December, down from 52.6 in November, still at levels consistent with significant growth.

Technical Analysis: EUR/USD remains in a downtrend from 1.1800

The EUR/USD is in a bearish correction from late December highs of 1.1808, with support at the 1.1650 area. Technical indicators in the 4-hour chart show a neutral-to-negative bias. The 4-hour Moving Average Convergence Divergence (MACD) histogram bars are moving around the zero level, suggesting a lack of momentum, while the Relative Strength Index (RSI) remains in negative territory at 40.

To the downside, Monday's low of 1.1659 is closing the path towards the December 8 and 9 lows, in the area of 1.1615. On the other side, upside attempts remain capped below 1.1700 so far. Further up, the descending trendline from December highs, at 1.1735, and Tuesday's high, at 1.1740, are the next targets.

(This story was corrected on January 7 at 12:57 GMT to say that the upside could target the descending trendline from December highs, not from December lows.)