EUR/USD is holding at the floor of near-term range ahead of US inflation data

EUR/USD

The Euro is holding around pivotal Fibo support at 1.0960 (23.6% of 1.0516/1.1095) after several attacks failed to register a daily close below this level, pointing to significance of support and adding to signals of another rejection.

Near-term action is pressuring the floor of recent range but lacking clear direction while moving within the range boundaries.

Daily studies weakened (10/20DMA turned bearish / momentum is neutral) but expected overall bullish alignment while the price stays above 1.0960 pivot.

This would signal prolonged sideways mode, with the downside to remain vulnerable while the price stays below 1.10 marks, with break here to increase potential for renewed attack at range top (1.1095 – 2023 high).

Fundamentals are likely to have significant impact on pair’s near-term performance, as markets await release of US inflation data for April.

Annualized CPI is expected to remain unchanged at 5%, though core inflation is forecasted to tick lower (Apr 5.5% from Mar 5.6%), with weaker than expected Apr numbers to contribute to Fed’s signal to pause its aggressive tightening cycle, which would offer support to euro.

In addition, growing speculations that the US central bank may start cutting rates, due to slower economic activity on high borrowing costs, rising stress in the banking sector and , would further deflate dollar.

On the other hand, fresh rise in inflation would generate strong warning that the Fed’s job with curbing inflation is not over and increase pressure on the single currency.

Res: 1.1000; 1.1053; 1.1075; 1.1095.
Sup: 1.0942; 1.0909; 1.0874; 1.0831.

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