EUR/USD Has Recovered Some Ground, But Further Gains Are Still Unclear

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EUR/USD Current Price: 1.1740

• US inflation was confirmed at 5.4% YoY in July, in line with the preliminary estimate.
• US Federal Reserve officials cooled down tightening expectations for the near term.
• EUR/USD has recovered some ground, but further gains are still unclear.

The EUR/USD pair recovered from a fresh monthly low of 1.1705 to settle at around 1.1740, following the release of US inflation figures. The Consumer Price Index in the country was confirmed at 5.4% YoY in July, as previously estimated and above the 5.3% forecast. The figure was far from a shocker, already priced in. At the same time, Fed officials continue to cool down tightening expectations in the near term.

 Kansas City Federal Reserve President Esther George said that the time has come to dial back the settings on the monetary policy, although she added that tapering does not imply any following policy rate adjustment. Even further, she also noted that the road ahead to policy  normalization “is likely to be a long and bumpy.” Wall Street rallied once again, with the DJIA and the S&P 500 reaching record highs

Earlier in the day, Germany confirmed July CPI at 3.8% YoY as previously estimated. On Thursday, the EU will publish June Industrial Production, foreseen down 0.2% MoM and up 10.4% YoY. The US will release June Producer Price Index data and Initial Jobless Claims for the week ended August 6, expected at 375K.

EUR/USD short-term technical outlook

The EUR/USD pair retains its modest intraday gains heading into the Asian opening, but its bullish potential is limited. The 4-hour chart shows that the price seesaws around a still bearish 20 SMA, while the longer ones are pretty much directionless, some 100 pips above the current level. Meanwhile, technical indicators have recovered from oversold readings but lost upward strength below their midline, putting at doubt a steeper advance.

Support levels: 1.1705 1.1660 1.1620

Resistance levels: 1.1750 1.1790 1.1830

Image Sourced from Pixabay

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.