German CPI Preview: What to Expect of EUR/USD?

The EUR/USD pair extended its post-Brexit rebound this Wednesday, although remains capped by the 200-DMA barrier placed at 1.1100 handle. A risk-on market profile continues to keep the greenback on the back foot and hence, keeps the recovery alive in the major.

Moreover, with expectations of an upbeat annualized German CPI print, the main currency pair continues to trade in the upper bound of today’s trading range near 1.1090 region, attempting another run for a decisive break above 1.11 handle.

Firmer regional y/y CPI readings point to an upbeat nationwide print

The German inflation data is up for release later this session, with the CPI figures expected to show a 0.2% gain on a monthly basis, after 0.3% reported a month ago, while adding 0.3% annually, compared to the 0.1% result reported in May.

Germany's regional CPIs released earlier today also paints a weaker picture of the harmonized German CPI report, with Brandenburg inflation for the month of May MoM coming in at +0.1% vs +0.3% prev, while the YY was -0.1% vs -0.2% prev. In Hesse, MoM stood at -0.1% vs +0.4% prev, with YoY at 0.0% as prev. Meanwhile, in Bavaria, the MoM came at +0.1% vs +0.4% prev, with YoY at +0.6% vs +0.3% prev. 

However, the German data is expected to have limited impact on the EUR/USD pair, as the main highlight for this Wednesday remains the EU Summit, with the Brexit decision on top of the agenda.

EUR/USD Technical Levels

At 1.1090, the pair finds the immediate resistance 1.1100/03 (200-DMA/ daily high). A break beyond the last, doors will open for a test of 1.1150 (psychological levels). On the flip side, the immediate support is placed at 1.0971 (Jun 26 low) below which at 1.0913 (Brexit low) could be tested.