EUR/USD: 1.19 Remains Evasive Ahead of Eurozone's Inflation Data

Summary:

EUR/USD remains under the crucial resistance level of 1.1900 ahead of Eurozone's CPI numbers. US retail sales are also a key driver.

EUR/USD is trading sideways as investors await inflation data from the US and Eurozone. Analysts expect Eurostat to release a CPI reading of 1.9% YoY compared to the prior month’s 2.0%. A higher-than-expected figure is likely to boost the currency pair.

At the same time, EUR/USD will be reacting to the US retail sales scheduled for release on Friday. The forecasted decline of June’s retail sales by 0.4% MoM is better than the prior month’s fall of 1.3%. the data comes a day after the Fed Chair’s testimony before Congress.

EURUSD technical analysis

EUR/USD has eased after hitting an intraday high of 1.1852. At the time of writing, it was down by 0.21% at 1.1811. Notably, the crucial level of 1.1900 has been an evasive one for the pair since the beginning of the month. On a two-hour chart, it is trading along the middle Bollinger band. Based on the technicals, coupled with investors’ focus on Eurozone and US inflation data, the outlook is rather neutral.

I expect EUR/USD to continue finding support at 1.1800 ahead of the anticipated inflation data from both regions. Depending on the outcome, it may move below its current support level at 1.1783 to 1.1746. Below that level, the next target will be at the psychological 1.1700.

On the flip side, a move above the resistance level of 1.1854, which is along the upper Bollinger band, will place the next target at 1.1900.