EUR/USD regains 1.1280 post-US CPI, focused on Brexit

The upbeat momentum remains well and sound around the shared currency, with EUR/USD now retaking the 1.1275/80 band in the wake of US data releases.

EUR/USD bid on US data, looks to Brexit vote

Spot keeps the daily range after US inflation figures gauged by the CPI came in in a mixed tone. In fact, headline consumer prices rose at a monthly 0.2% during February and 1.5% from a year earlier.

In addition, prices stripping food and energy costs rose less than expected 0.1% inter-month and 2.1% over the last twelve months, also missing estimates.

Spot managed to bounce off daily lows in the mid-1.1200s following the publications although a test/surpass of the critical barrier at 1.1300 the figures remains elusive for EUR-bulls for the time being.

Looking ahead, investors will look across the Channel, as the House of Commons will vote on UK PM May’s Brexit deal later in the European evening.

What to look for around EUR

Market participants appear to have already adjusted to the recent and renewed dovish stance from the ECB, focusing instead on the broad risk-appetite trends as the main driver of the price action in the near term. In the longer run, the performance of the economy in the region should remain in centre stage along with prospects of re-assessment of the ECB’s monetary policy. In this regard, it is worth mentioning that investors keep pricing in the first rate hike by the central bank at some point in H2 2019. On the political front, headwinds are expected to emerge in light of the upcoming EU parliamentary elections, where the focus of attention will be on the potential increase of the populist option among voters.

EUR/USD levels to watch

At the moment, the pair is gaining 0.29% at 1.1276 and a breakout of 1.1312 (21-day SMA) would target 1.1370 (55-day SMA) en route to 1.1419 (high Feb.14). On the other hand, the next support aligns at 1.1176 (2019 low Mar.7) followed by 1.1118 (monthly low Jun.20 2017) and finally 1.1021 (high May 8 2017).