EUR/USD steadies near 1.1700, eyes on US CPI data

EUR/USD stays under modest bearish pressure on Wednesday.
US Dollar Index rises for the fourth straight day.
Focus shifts to inflation data from the US.

Eren Sengezer FXStreet

After closing the seventh straight day in the negative territory, the EUR/USD pair extended its slide during the Asian trading hours and touched its lowest level since late March at 1.1700 before going into a consolidation phase. As of writing, the pair was posting small daily losses at 1.1710.

The unabated USD strength continues to weigh on EUR/USD. The US Dollar Index is currently trading at its strongest level in more than four months at 93.19, rising 0.13% on the day.

Later in the session, Consumer Price Index (CPI) data from the US will be looked upon for fresh impetus. On a yearly basis, CPI in the US is expected to edge lower to 5.3% from 5.4%. Unless the print is much lower than expected, the greenback is likely to continue to outperform its rivals on the Fed's tapering prospects before the end of the year.

Earlier in the day, the Harmonized Index of Consumer Price (HICP) for Germany, the European Central Bank's preferred gauge of inflation, arrived at 3.1% in July, matching June's print and the market expectation.

EUR/USD near-term outlook

Société Générale analysts think that EUR/USD could target 1.1600 with a break below 1.1700. “Support for EUR/USD below 1.1704 is at 1.1695. A deeper pullback towards 1.1600 beckons on a successful break," analysts explained. "A below-forecast number on US CPI today could elicit pockets of short-covering, only for the rally to be sold again."

EUR/USD to suffer a substantial drop to 1.16 on a slide below 1.17 – SocGen.

Additional levels to watch for

EUR/USD

Overview
Today last price	1.1711
Today Daily Change	-0.0010
Today Daily Change %	-0.09
Today daily open	1.1721

Trends
Daily SMA20	1.1811
Daily SMA50	1.191
Daily SMA100	1.1964
Daily SMA200	1.201

Levels
Previous Daily High	1.1743
Previous Daily Low	1.171
Previous Weekly High	1.19
Previous Weekly Low	1.1755
Previous Monthly High	1.1909
Previous Monthly Low	1.1752
Daily Fibonacci 38.2%	1.1723
Daily Fibonacci 61.8%	1.173
Daily Pivot Point S1	1.1706
Daily Pivot Point S2	1.1692
Daily Pivot Point S3	1.1673
Daily Pivot Point R1	1.1739
Daily Pivot Point R2	1.1758
Daily Pivot Point R3	1.1772

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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