EUR/USD: Euro to lose interest on soft EU inflation data

The EUR/USD pair seems to have gone into a consolidation phase below 1.1300 as investors await EU inflation data. Euro could lose traction on soft EU inflation print, FXStreet’s Eren Sengezer reports.

Euro faces stiff resistance levels at 1.1300 and 1.1320

“The Consumer Price Index (CPI) in the euro area is forecast to edge lower to 4.4% on a yearly basis in January from 5% in December. A weaker-than-expected CPI print could make it difficult for the shared currency to continue to outperform the greenback. On the other hand, EUR/USD could gather further bullish momentum in case inflation proves to be hotter than expected in January.”

“In order to extend its recovery, EUR/USD needs to overcome 1.1300, where the Fibonacci 50% retracement of the two-week-long downtrend is located. Above that level, the 200-period and the 100-period SMAs on the four-hour chart form stiff resistance at 1.1320 before the pair could target 1.1340 (Fibonacci 61.8% retracement).”

“On the downside, 1.1260 (Fibonacci 38.2% retracement) aligns as first support. If this level turns into resistance, additional losses toward the 1.1210/1.1200 area (Fibonacci 23.6% retracement, psychological level) could be witnessed.”