- EUR/USD stays below 1.0850 in the European morning on Thursday.
- German and US inflation data will be watched closely by market participants.
- The pair faces key near-term support level at 1.0800.
EUR/USD recovered from the weekly low it touched below 1.0800 and ended the day virtually unchanged on Wednesday. The pair fluctuates in a tight range near 1.0850 early Thursday as investors await key data releases.
The data from France showed on Thursday that the Consumer Price Index (CPI) rose 0.9% on a monthly basis, surpassing the market expectation for a 0.7% increase. This reading helped the Euro edge higher in the early European session.
Euro price this week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | -0.23% | 0.07% | 0.52% | 0.86% | -0.50% | 1.50% | -0.31% | |
| EUR | 0.22% | 0.28% | 0.74% | 1.08% | -0.28% | 1.71% | -0.09% | |
| GBP | -0.06% | -0.29% | 0.46% | 0.80% | -0.56% | 1.45% | -0.37% | |
| CAD | -0.53% | -0.76% | -0.47% | 0.36% | -1.03% | 1.00% | -0.84% | |
| AUD | -0.89% | -1.09% | -0.81% | -0.35% | -1.38% | 0.64% | -1.19% | |
| JPY | 0.51% | 0.26% | 0.59% | 1.03% | 1.36% | 2.02% | 0.18% | |
| NZD | -1.55% | -1.77% | -1.47% | -1.01% | -0.65% | -2.04% | -1.86% | |
| CHF | 0.31% | 0.09% | 0.37% | 0.83% | 1.18% | -0.19% | 1.82% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
Germany’s Destatis will publish the preliminary CPI data for February later in the day. On a yearly basis, the CPI inflation is forecast to ease to 2.6% from 2.9% in January. The Harmonized Index of Consumer Prices (HICP), the European Central Bank’s (ECB) preferred gauge of inflation, is expected to increase 0.6% on a monthly basis following the 0.2% decline recorded in December. In case the monthly HICP rises at a stronger pace than anticipated, the initial market reaction could help the Euro stay resilient against its rivals.
The US economic docket will feature the Personal Consumption Expenditures (PCE) Price Index data for January. Hot CPI and Producer Price Index (PPI) readings for January revived expectations for a delay in the Federal Reserve’s (Fed) policy pivot.
Core PCE inflation, which excludes volatile food and energy prices, is forecast to rise 0.4% on a monthly basis in January. Markets fully price in a no change in the Fed policy rate in March and see an 80% probability that the Fed will opt for one more pause in May, according to the CME FedWatch Tool.
In case monthly core PCE inflation rises more than expected in January, the USD could gather strength, with investors reassessing the total reduction in interest rates in 2024. New York Fed President John Williams said on Wednesday that the inflation outlook has improved and his baseline scenario was for three rate cuts this year.
On the other hand, a soft monthly Core PCE print, at or below 0.2%, could trigger a USD selloff with the immediate reaction.
EUR/USD broke below the ascending trend line but staged a rebound after testing the 200-period Simple Moving Average (SMA) on the four-hour chart. In the meantime, the Relative Strength Index recovered back above 50, reflecting sellers’ hesitancy.
On the upside, 1.0860 (Fibonacci 38.2% retracement of the latest downtrend, ascending trend line) aligns as key resistance. In case the pair stabilizes above that level, it could target 1.0900-1.0910 (psychological level, Fibonacci 50% retracement) and 1.0940 (static level).
1.0820 (200-period SMA) stays intact as dynamic support before 1.0800-1.0790 (psychological level, Fibonacci 23.6% retracement, 100-period SMA) and 1.0760 (static level).
