The EURUSD pair is little changed today as investors wait for the important German inflation data and the closely-watched sentiment numbers from Europe. The pair is trading at 1.1675, which is a few pips below its yesterday’s high of 1.1683.
The biggest catalyst for the EURUSD will be the German inflation data. Analysts polled by Reuters expect the data to show that the country’s headline consumer inflation declined by 0.1% in September. That will be worse than the 0.0% figure that came out in August. They also see the CPI falling by 0.1% on a month-on-month basis.
The German CPI data will come a day before the Eurostat is scheduled to release the merged data from the Eurozone. In the EU, analysts see the consumer prices falling by 0.2% in September.
The EURUSD will also react to the sentiment data that will be released by the European Commission. Analysts expect the data to show that the business and consumer survey increased to 89.5 in September while the consumer confidence is expected to remain unchanged at -13.9. The service and industrial sentiment are expected to improve to -15.3 and -9.5, respectively.
The four-hour chart shows that the EURUSD pair has managed to bounce back from last week’s low of 1.1615. The chart also shows that the 25-day and 15-day exponential moving averages are close to making a bullish crossover.
Therefore, while the overall trend remains bearish, I suspect that bulls will likely push it to test the important resistance level at 1.1750. This price is along the neckline of the head and shoulders pattern that is visible clearly on the daily chart. This price is also along the previous first support level. On the flip side, a move below last week’s low of 1.1615 will invalidate this thesis.
