EUR/USD looking for 1.1000 as risk appetite shrugs off Eurozone HICP inflation miss

• EUR/USD up nearly half a percent on Tuesday despite a below-expectation HICP inflation print.
• Plenty of US data still on the docket this week to drive the EUR/USD into the holiday weekend.
• EU & US Consumer Confidence up next for Wednesday.

The EUR/USD is drifting towards the 1.1000 major handle once more after failing to capture the key technical level last week. The pair struck an intraday high of 1.1009 last Thursday, but gave up the high ground heading into the weekend.

Eurozone Final Harmonized Index of Consumer Prices (HICP), the European equivalent to Consumer Price Index, missed the market on Tuesday, with November’s EU inflation index declining 0.6%, below the market’s forecast of -0.5%, in-line with the earlier preliminary print.

Read More: Eurozone Preliminary HICP inflation softens to 2.4% YoY in November vs. 2.7% expected

Market sentiment is decidedly risk-on for Tuesday, putting downside pressure on the US Dollar (USD) heading toward the midpoint of 2023’s last full trading week. US Building Permits in November came in slightly lower, printing at 1.46 million versus the forecast 1.47 million, declining slightly from October’s 1.498 million (revised up slightly from 1.487 million). US housing data balanced out with a better-than-expected print in US Housing Starts for November, coming in at 1.56 million versus the forecast 1.36 million and stepping over October’s 1.359 million (revised downward from 1.372 million).

Coming down the pipeline will be the last print of US Gross Domestic Product (GDP) numbers in 2023 on Thursday, followed by US Core Personal Consumption Expenditure (PCE) Price Index numbers on Friday.

US GDP for the third quarter is broadly expected to hold steady at 5.2%, while annualized Core PCE is forecast to tick down slightly from 3.5% to 3.3%. 

EUR/USD Technical Outlook 

The EUR/USD remains well-bid in the near-term after last week’s hard rally that saw the pair crack straight through the 200-hour Simple Moving Average (SMA) near the 1.0800 handle, a broad weakening in the US Dollar is giving the Euro a chance to scramble for higher ground.

Friday’s pullback after a failed run at the 1.1000 major price level saw the pair hesitate back into the 1.0900 region, but this week sees the EUR/USD grinding higher once more.

Last week’s rally also saw the pair retake the bullish side of the long-term 200-day SMA, extending the Euro’s rebound from October’s bottom bids of 1.0450.

EUR/USD Hourly Chart

EUR/USD Daily Chart

EUR/USD Technical Levels