EUR/USD: Key Levels Ahead of Eurozone’s CPI Data

Summary:

While EUR/USD is trading lower, it remains on an uptrend. Investors now await Eurozone's CPI and US building permits numbers.

EUR/USD is trading lower after reaching a 6-week high on Thursday. The market is reacting to the strong US retail sales and jobless claims data. US retail sales rose by 9.8% in March compared to the forecasted 5.9%. On a YoY basis, the published 28.6% is higher than the expected 15%. Furthermore, the initial jobless claims data came in at 576,000 compared to the forecasted 700,000.

The strong US data largely result from the $1.9 trillion stimulus package. Despite the current pullback, EUR/USD is still on an uptrend. This represents the investors’ opinion that the impact of the stimulus will soon fade away.

Later in the day, the pair will be reacting to Eurozone’s CPI numbers. Analysts expect a reading of 1.3%, up from the previous 0.9%. Besides, the Census Bureau is set to release the US building permits data in today’s session. The predicted 1.75 million is higher than February’s 1.682 million.

EUR/USD Technical Outlook

EUR/USD is trading lower by 0.01% at 1.1966 after hitting a 6-week high of 1.1995 in the previous session. 1.1991 has been an important resistance level that the pair previously failed to push past on 11^th and 18^th March. However, it remains within the ascending channel. Besides, it is trading above the 20 and 50-day exponential moving averages.

EUR/USD is likely to rise as it strives to breakout of the current resistance level. A move past 1.2000 will place the next target at 1.2050.

On the flip side, the pair may continue finding support at 1.1950 as it gathers momentum to resume its uptrend. However, more bears in the market could push it lower to 1.1900.