EUR/USD Close to Recent Highs Ahead of the US CPI Release

Summary:

EUR/USD remains well bid but struggles at dynamic resistance. The 1.20 level is pivotal ahead of the US CPI data later in the trading day.

The EUR/USD pair had a hard time breaking the 1.22 area, but it surely does meet support at 1.21. The 1.20 level still looks like the one level that is pivotal in the months ahead, so only a close below puts more pressure on the pair.

Today is the inflation data, with the market consolidating in tight ranges until the US CPI comes out. In fact, if we look at the EURUSD closing levels from last week, we see that the pair is only twenty pips below. Effectively, it means that no one takes a chance ahead of the US inflation data, despite the fact that the Dow Jones and other US stock indices had a hard time this week, dropping significantly.

Earlier today, the German inflation data for the month of April came out in line with expectations. The prices of goods and services increased by 0.7% in April, without triggering any move on the euro pairs.

EUR/USD Technical Analysis

The technical picture shows the sharp move higher from the 1.20 area. Only one day ahead of the NFP release, the EUR/USD bounced strongly, now pressuring the highs. Bears may want to sell for a move below the 1.20 and a stop at 1.22, for a nice risk-reward ratio.