EUR/USD Price Analysis: Bound in 50% and 61.8% Fibo retracement ahead of German Inflation

EUR/USD is displaying a sideways auction ahead of the German Inflation data.
The major currency pair is popping between the 50% and 61.8% Fibo retracement.
A range shift move by the RSI (14) into the 40.00-60.00 zone from the bearish range indicates signs of a bullish reversal.

Sagar Dua FXStreet

The EUR/USD pair is oscillating in an extremely narrow range around 1.0730 as investors are awaiting the release of the preliminary German inflation data for fresh impetus. The commentary from US President Joe Biden over the current altercation with China while addressing the State of the Union (SOTU) has failed to impact the risk appetite of the market participants.

The US Dollar Index (DXY) is displaying a sideways performance below 103.00, weighed down by US Treasury yields. The yields generated by 10-year US government bonds have dropped below 3.65%.

On the Eurozone front, the preliminary German Harmonized Index of Consumer Prices (HICP) (Jan) is expected to escalate to 10.0% from the former release of 9.6%.

EUR/USD has turned sideways after a wild movement post commentary from Federal Reserve (Fed) chair Jerome Powell on interest rate guidance. The major currency pair is expected to witness a sheer contraction in volatility ahead, which will result in wider ticks and heavy volume after an expansion in the same.

The shared currency pair is oscillating between the 50% and 61.8% Fibonacci retracements (placed from January 6 low at 1.0483 to February 1 high at 1.1033) at 1.0760 and 1.0694 respectively.

The 20-period Exponential Moving Average (EMA) at 1.0739 is acting as a major barricade for the Euro.

However, the Relative Strength Index (RSI) (14) has shifted into the 40.00-60.00 range from the bearish range of 20.00-40.00, which indicates signs of a bullish reversal.

Going forward, a break above Tuesday’s high at 1.0766 will drive the asset toward the round-level resistance at 1.0800 followed by 38.2% Fibo retracement at 1.0823.

On the flip side, a break below Tuesday’s low at 1.0669 will drag the major currency pair toward January 4 high at 1.0635 and December 22 low at 1.0573.

EUR/USD two-hour chart

EUR/USD

Overview
Today last price	1.0729
Today Daily Change	0.0004
Today Daily Change %	0.04
Today daily open	1.0725

Trends
Daily SMA20	1.0841
Daily SMA50	1.0693
Daily SMA100	1.0335
Daily SMA200	1.0321

Levels
Previous Daily High	1.0767
Previous Daily Low	1.0669
Previous Weekly High	1.1033
Previous Weekly Low	1.0793
Previous Monthly High	1.093
Previous Monthly Low	1.0483
Daily Fibonacci 38.2%	1.0706
Daily Fibonacci 61.8%	1.0729
Daily Pivot Point S1	1.0674
Daily Pivot Point S2	1.0623
Daily Pivot Point S3	1.0577
Daily Pivot Point R1	1.0771
Daily Pivot Point R2	1.0818
Daily Pivot Point R3	1.0869

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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