• Core CPI misses estimates and triggers fresh USD weakness.
• Pre-Fed repositioning trade now seemed to cap gains.
The EUR/USD pair reversed an early dip to 1.1730 level and refreshed session tops post-mixed US inflation numbers.
A miss on the core CPI figures, which largely negated mostly in-line headline CPI print, exerted some fresh downward pressure on the US Dollar and prompted some short-covering move just ahead of an important horizontal support near the 1.1715 region.
• US: Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4% in November
Barring the initial reaction, the pair lacked any strong follow-through momentum as investors seemed reluctant to place aggressive bets ahead of the highly anticipated FOMC decision, due to be announced later during the NY trading session.
Investors will also pay close attention to the US President Donald Trump's speech about tax reform, which could have a meaningful impact on the central bank's monetary policy outlook and also contribute towards determining the pair's next leg of directional move.
Technical outlook
Valeria Bednarik, American Chief Analyst at FXStreet writes: "Technically the 4 hours chart shows that the price keeps struggling around a 200 SMA an below its 20 and 100 SMAs, as technical indicators turned marginally higher within bearish territory, not enough at this point to suggest further gains ahead. The levels to watch are 1.1800 to the upside, and 1.1712 to the downside, as the break of any of those extremes should result in some directional continuation heading into Tuesday."
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