Bulls making another attempt to regain 1.2350. The US inflation to provide the next direction. The EUR/USD pair extends its range trade into a third day today, as markets refrain from placing big bets on the US dollar ahead of the critical US inflation report, which will shape up the outlook on the US interest rates.
Markets are expecting the headline US CPI numbers to decelerate to 0.2% m/m versus 0.5% previous while on an annualized basis, the consumer spending is seen improving slightly 2.2% versus 2.1% last.
Meanwhile, on the EUR-side of the equation, a lack of fresh fundamental drivers combined with the risk of the EU’s retaliation to the US trade tariffs continue to weigh negatively on the common currency. Further, expectations of dovish comments due to be delivered by the ECB President tomorrow also keeps a lid on the upside.
All eyes now remain on the US CPI figures for fresh trading impetus. In the meantime, the major will remain at the mercy of the USD dynamics.
Karen Jones, Analyst at Commerzbank, notes: “EUR/USD continues to be range bound within its February and early March boundaries at 1.2556/1.2155. Minor support is offered by the 55-day moving average at 1.2258 which is currently being targeted. Below it lies the 1.2165/55 area, made up of the mid-January and current March lows. Further sideways trading between these levels and the current March high at 1.2447 remains on the cards. If the 1.2447 level were to be exceeded the January and February highs at 1.2538/56 would be back in the picture”.