EUR/USD sits near weekly top, remains below 1.0600 ahead of flash Eurozone CPI

EUR/USD attracts fresh buying on Friday as the USD slides to over a two-week low.
Reduced bets for a jumbo ECB rate cut underpin the Euro and also support the pair.
Traders now look to the flash Eurozone consumer inflation figures for some impetus.

Haresh Menghani FXStreet

The EUR/USD pair regains positive traction following the previous day's modest downtick and climbs back closer to the weekly top during the Asian session on Friday. Spot prices, however, remain below the 1.0600 mark, which if cleared decisively should set the stage for an extension of the recent recovery from a two-year low touched last Friday.

The US Dollar (USD) struggles to capitalize on Thursday's modest gains and touches a fresh two-week low amid bets for another 25 basis points interest rate cut by the Federal Reserve (Fed) in December. This, in turn, is seen as a key factor lending support to the EUR/USD pair, though bulls seem reluctant ahead of the Eurozone consumer inflation figures. The data could offer hints on the European Central Bank's (ECB) next policy move, which, in turn, will drive demand for the shared currency and determine the next leg of a directional move for the currency pair.

In the meantime, hawkish comments from ECB's Isabel Schnabel earlier this week, which forced investors to scale back their bets for a more aggressive easing in December, underpins the shared currency and acts as a tailwind for the EUR/USD pair. The markets, however, are still pricing in a small chance for a 50 bps rate cut next month. The expectations were lifted by the release of flash German consumer inflation figures on Thursday, which rose less than expected in November. This, in turn, warrants some caution before placing fresh bullish around the pair.

Furthermore, expectations that US President-elect Donald Trump's expansionary policies will boost inflation and limit the scope for the Fed to cut rates further, along with geopolitical risk, might help limit losses for the safe-haven buck. This further makes it prudent to wait for strong follow-through buying and acceptance above the 1.0600 mark before positioning for an extension of the EUR/USD pair's multi-day-old uptrend. Nevertheless, spot prices remain on track to snap a three-week losing streak and end on a positive note heading into the weekend.

Economic Indicator

Core Harmonized Index of Consumer Prices (YoY)

The Core Harmonized Index of Consumer Prices (HICP) measures changes in the prices of a representative basket of goods and services in the European Monetary Union. The HICP, – released by Eurostat on a monthly basis, is harmonized because the same methodology is used across all member states and their contribution is weighted. The YoY reading compares prices in the reference month to a year earlier. Core HICP excludes volatile components like food, energy, alcohol, and tobacco. The Core HICP is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish.

EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold hits a fresh record high as rising geopolitical risks boost safe-haven demand

Gold scales higher for the third straight day and climbs to a fresh all-time peak, beyond the $4,550 level, during the Asian session on Monday. Reports that US President Donald Trump is weighing a series of potential military options in Iran following deadly protests in the country fuel the risk of a further escalation of geopolitical tensions amid the protracted Russia-Ukraine war. This, along with rising bets for more rate cuts by the Fed, offsets the recent US Dollar rally and is seen benefiting the safe-haven bullion.

Week ahead: US CPI might challenge the geopolitics-boosted Dollar

Geopolitics may try to steal the limelight from US data. A possible US Supreme Court ruling on tariffs could dictate market movements. Dollar strength might be tested if investors refocus on Fed expectations. A crammed data calendar next week, US CPI comes on Tuesday; Fedspeak to intensify. Euro weakness persists, lingering risk of deterioration in US-EU relations.

Week ahead – US CPI might challenge the geopolitics-boosted Dollar

Geopolitics may try to steal the limelight from US data. A possible US Supreme Court ruling on tariffs could dictate market movements. A crammed data calendar next week, US CPI comes on Tuesday; Fedspeak to intensify.

XRP trades under pressure amid weak retail demand

XRP presses down on the 50-day EMA support as risk-averse sentiment spreads despite a positive start to 2026. XRP faces declining retail demand, as reflected in futures Open Interest, which has fallen to $4.15 billion.