EUR/USD Mid-Session Technical Analysis for January 12, 2018

The EUR/USD is up sharply for a second day as investors prepare for the release of the latest data on U.S. consumer inflation at 1330 GMT. The CPI report is expected to show inflation grew by 0.1% in December. Core CPI is expected to show an increase of 0.2%.

On Thursday, the Forex pair rose in reaction to a combination of weaker-than-expected U.S. producer inflation and comments by the European Central Bank that could mean the central bank is preparing to trim its massive monetary stimulus.

A weaker-than-expected CPI number could spike the EUR/USD higher.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed when buyers took out swing tops at 1.2088 and 1.2092. The next major target is the long-term 50% level at 1.2166.

Daily Technical Forecast

Based on the early price action, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the former top at 1.2092.

A sustained move over 1.2092 will signal the presence of buyers. This move could create the upside momentum needed to challenge the major 50% level at 1.2166. This is another trigger point for an acceleration to the upside.

A sustained move under 1.2092 will indicate the presence of sellers. This could lead to a labored break due to potential support levels at 1.2088, 1.2076 and 1.2035. The latter held as support earlier in the session.

If 1.2035 fails as support then look for the EUR/USD to possibly accelerate into 1.1975.