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EUR/USD Fails to Sustain Gains and Slides Below 1.0700

Published 02/16/2023, 09:24 AM
Updated 07/09/2023, 06:32 AM

The EUR/USD pair treads water on Thursday as the dollar shrugged off mild intraday weakness following the release of U.S. producer price index (PPI) data. At the time of writing, the EUR/USD pair is trading at the 1.0685-90 area, virtually unchanged on the day, after retreating from a daily high of 1.0723.

U.S. producer price index inflation slowed slightly, still coming higher than expected in January, with the PPI annual inflation rate printing 6%, versus 6.5% the previous month and 5.4% forecasted. The core rate, which excludes volatile items such as food and energy, came in at 5.4% versus 5.5% the previous month but above the 4.9% expected.

Separated data showed initial jobless claims edged down to 194,000 in the week ending February 10 from 195,000 the previous week and below the 200,000 of consensus. Market participants continue to look at developments from both the European Central Bank (ECB) and the Federal Reserve when it comes to the potential next steps in monetary policies, as the key drivers for the price action.

EUR/USD Daily Chart

From a technical perspective, the EUR/USD pair maintains a short-term bearish bias according to indicators on the daily chart, while the price hovers below a descending 20-day simple moving average (SMA) but above the 100- and 200-day SMAs.

If the pair loses the 1.0650 zone, it could extend its decline toward the next support area at around 1.0580. On the flip side, the next resistance levels are seen at February 15 high at 1.0745 and the 20-day SMA at 1.0810.

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