EURUSD Struggles to Hold Level Post Bearish CPI Data

The Euro has been losing ground to the US Dollar in recent weeks, descending in a narrow channel after breaking below a rising trend line from April 2017. In fact, its decline occurred alongside broad greenback gains. The ECB has recently signaled that interest rates could remain low for an extended period of time at their April rate decision. Then, just yesterday softer Euro zone inflation figures crossed the wires. The latter helps build the case that the European Central Bank may stay patient on hiking after its quantitative easing program runs until September.

EURUSD Continues Struggle

Meanwhile in the US, the Fed just had their monetary policy announcement where the central bank prepared the markets for the next expected hike in June. In addition, the Fed also upgraded its views on inflation. With US government bond yields on the rise in anticipation of higher rates in the future, the greenback may continue finding itself appreciating in the near-term. This presents evidence to argue that EUR/USD could be in for some more losses ahead.

After three losing sessions, EUR/USD was in green territory in the Thursday session. However there have been signs of the pair struggling to hold 1.20 levels as price went down to 1.198’s post inflation data during early Asian trading hours today morning albeit continuing to move in range bound fashion. On the release front, Euro zone CPI Flash Estimate dropped to 1.2%, shy of the estimate of 1.3%. Core CPI Flash Estimate followed a similar trend, dipping to 0.7%, short of the forecast of 0.9%. The pair is mainly trading sideways as market participants are taking some profits from the USD long trade. The market is still weighing the FOMC statement released on Wednesday.

Traders are on look out for Service PMI & Markit Composite PMI from France & Germany and Euro zone’s Retail sales data on European market and Non-Farm Payroll, Unemployment data from US market to be released today. The outcome for pair as trading closes for the week is expected to remain range bound while in bear’s favor and the support level for pair as trading moves into next week will be decided post today’s news release. The overall trend for the pair continues to remain bearish in short term. The support price levels are seen at 1.1937 / 1.1800 while resistance price levels are seen at 1.2000 / 1.2054 respectively.