- DXY rebound stalls.
- Eurozone CPI y/y matches estimates.
- German politics, ECB jawboning still weigh.
Bang on expectations annualized Eurozone final CPI estimate provided extra legs to the ongoing recovery in the EUR/USD pair from a dip just ahead of the 1.22 handle.
The spot is seen making recovery attempts after the Asian corrective slide, largely on the back of the stalled rebound in the US dollar versus its major peers, as the US government shutdown fears resurface ahead of the January 19th deadline. The USD index faced rejection just ahead of the 90.50 barrier, now easing back to 90.35 region, still up +0.12% on the day.
The EUR bulls were also offered some respite on the release of the Eurozone final CPI numbers, which showed the final reading confirmed the flash estimate of 1.4% on an annualized basis.
However, it remains to be seen if the pair can take on the recovery towards the 1.23 mark, as the German political breakdown combined with the EUR jawboning by the ECB policymakers, continue to dampen the sentiment around the common currency.
ECB’s Nowotny: Euro exchange rate must be observed
ECB’s Constancio: Worried about Euro moves that don't reflect fundamentals
With the Eurozone final CPI out of the way, all eyes remain on the US industrial figures and Fedspeaks for further momentum on the prices.
EUR/USD Technical Levels
Karen Jones Analyst at FXStreet, writes: “EUR/USD charted an inside day and has shot higher overnight. The new high has not been confirmed by the daily RSI and we would allow for a small pullback currently this is indicated to terminate circa 1.2150-1.2110. Beyond this, it remains on course to challenge the 1.2432 200 month ma. Support should be offered by the 1.2092 September high and the 20-day moving average at 1.2016 – the market will remain immediately bid above here.”
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