EUR/USD looks up from the low end ahead of key CPI print
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EUR/USD rose on Tuesday, reclaiming the 1.0300 handle.
Euro traders are holding out hopes that a French accord will avoid government collapse.
Key US CPI inflation figures are due on Wednesday.
EUR/USD found enough gas in the tank for an intraday rally on Tuesday, rising over eight-tenths of one percent on the day as Euro bidders hope that a potential accord in France could stave off a total collapse of the European country’s government. Market sentiment improved on Tuesday, further bolstering Fiber bidding after US Producer Price Index (PPI) inflation rose at a slower pace than expected. Economic data remains limited on the European side of the market space, leaving Fiber traders to grapple with overall Greenback flows.
Headline PPI inflation increased to 3.3% YoY, up from 3.0% previously, while core PPI rose to 3.5% YoY, compared to the earlier rate of 3.4%. Although both sides of the print came in below expectations, inflationary pressures persist in the background, albeit at a slightly reduced intensity than many economists had predicted. With inflation indicators continuing to exceed the Federal Reserve's (Fed) annual targets, PPI results coming in below forecasts provide little distinction concerning the outlook for interest rate cuts.
Regarding the US data for Wednesday, CPI is anticipated to rise to 2.9% YoY from the previous 2.7%, remaining well above the Fed’s 2.0% annual inflation target.
EUR/USD price forecast
EUR/USD rallied back into the 1.0300 handle on Tuesday, heading into Wednesday on a notable upswing, however the pair remains buried deep into the bearish side of the charts. The pair briefly slumped below 1.0200 earlier this week, chalking in a fresh 265-month low.
Fiber is trading well below it’s 200-day Exponential Moving Average (EMA) after facing a technical rejection to the downside from the key moving average in November. While 1.0200 could prove to be a convenient near-term technical floor for bulls to stage a recovery, cool-headed traders will wait and look for signs of a higher low as EUR/USD breathes its way through the first quarter.
EUR/USD daily chart
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