The EUR/USD currency pair is currently in a consolidation phase around the 1.0850 level, following a positive performance this past Wednesday. The key technical resistance is identified at 1.0870, corresponding with the 200-day Simple Moving Average (SMA). As the market anticipates forthcoming inflation data from both the Eurozone and the United States, traders remain cautious.
Despite the ongoing consolidation, the near-term outlook for the EURO against its counterparts appears to maintain a bullish sentiment. However, any sustained upward movement may be contingent on breaking above the resistance level at 1.0870, which has proven to be a significant barrier for buyers.
The EURO gained momentum recently as economic data from Germany revealed a 0.2% growth in Gross Domestic Product (GDP) for the third quarter, surpassing initial projections of a 0.1% decline. Additionally, annual inflation in Germany, as measured by the Consumer Price Index (CPI), climbed to 2% in October from 1.6% in September, further strengthing the EURO ’s position.
Conversely, the US Dollar has faced mixed pressures from recent economic indicators. The ADP Employment Change report for October showed an increase of 233,000 jobs, significantly exceeding forecasts. However, the GDP growth estimate for the third quarter registered at 2.8%, below the anticipated 3%, leaving the dollar less buoyant.
Later in the trading session, key inflation data from the Eurozone’s Harmonized Index of Consumer Prices (HICP) and the US Personal Consumption Expenditures (PCE) Price Index will be released. Despite these data points, market participants may not react strongly given that the previous PCE figures indicated a decline in inflation.
As the end of the European session approaches, month-end transaction flows could contribute to increased volatility in currency markets, potentially impacting major pairs unpredictably. The current technical indicators suggest continued bullish potential for the EUR/USD , with resistance and support levels carefully monitored for further market direction.
