Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

EUR/USD Hits Fresh Six-Month Highs, Inflation Data Awaited

Published 01/11/2023, 12:01 PM
Updated 07/09/2023, 06:32 AM

The EUR/USD pair rose for a fourth straight day on Wednesday but continued to trade within a constrained range as investors take the back seat ahead of the U.S. December Consumer Price Index (CPI) report on Thursday.

In the meantime, hawkish comments from ECB Governing Council member Olli Rehn and the renewed U.S. Dollar weakness fueled the pair's rally.

At the time of writing, the EUR/USD trades at the 1.0765 area, 0.32% above its opening price, having posted a fresh six-month high of 1.0776 at the beginning of the New York session.

Attention remains on U.S. CPI figures. The annual inflation rate is expected to ease to 6.5% in December, down from 7.1% in November. Core inflation is seen slowing to 5.7% from 6.1% prior.

If data confirms a deceleration of the inflation rate – the first decline in over two years for the core gauge – it could fuel expectations of a less aggressive Fed, weighing on yields and the dollar.

According to the WIRP tool, a 25 bp rate increase is completely priced in for the February meeting with less than a 30% probability of a greater 50 bp move.
EUR/USD Daily Chart

From a technical perspective, the EUR/USD holds a short-term positive bias according to the daily chart, as the pair is trading above its key moving averages while indicators are gaining upward momentum.

On the upside, the 1.0780 zone stands as the immediate resistance level, ahead of the 1.0800 psychological threshold,s and the 50% retracement of the 1.2266-0.9535 decline at 1.0900.

On the flip side, the following support levels are seen at Tuesday's low at 1.0710, the 20-day SMA around 1.0635, and the 1.0500 zone–broken descending trendline.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.