EUR/USD retreats from highs above 1.0800 area after US inflation data

• The Euro wavers after the US CPI report meets expectations.
• All eyes are now on Wednesday's Fed monetary policy statement.
• EUR/USD’s immediate trend remains bearish while below 1.0815.

The Euro spiked higher but ended up turning lower with US yields bouncing up, pushing the US Dollar a tad higher after US CPI data met expectations.

Consumer prices remained flat in November, against the market consensus of a 0.1% increase but that was the whole surprise. Yearly inflation eased to 3.1% from 3.2% in the previous month with core inflation rising at a 0.3% monthly pace and 4.0% year-on-year, as expected.

These figures fail to clarify the Fed’s monetary policy path and maintain the interest on the outcome of the two-day monetary policy meeting. The Bank's statement, especially the interest rate projections, the so-called dot-plot, and Chairman Powell’s Press conference will be carefully watched.

EUR/USD Technical analysis

The technical picture remains unchanged, with the pair consolidating above the 50% Fibonacci retracement of the October - November rally, at 1.0730.

Immediate resistance remains at 1.0815, where previous highs meet the 4h 50 SMA and 1.0880 will come next. Supports are at the mentioned 1.0730 and early November lows at 1.0660
 

Technical levels to watch