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• EUR/USD tapped the 1.0200 handle for the first time in over two years on Monday.
• European final inflation figures are due this week, but are unlikely to move the needle.
• It’s the Greenback’s ballgame to lose this week with key US inflation figures on the data docket.

EUR/USD continued to explore the bearish side of the charts on Monday, declining into the 1.0200 handle for the first time since late 2022, etching in a fresh 26-month low before staging half-hearted recovery later in the day.

European economic data remains tepid throughout the trading week. The European Central Bank (ECB) is set to continue reducing interest rates, further widening the Euro’s interest rate differential against the US Dollar. Pan-ERU and German final inflation due through the midweek sessions are not expected to deviate significantly from their preliminary prints.

US Producer Price Index (PPI) figures kick the week’s meaningful data docket off on Tuesday, which is expected to rise to 3.7% YoY in December versus the previous 3.4%. US CPI inflation, also due on Wednesday, is forecast to tick higher to 2.8% from 2.7%, and US Retail Sales activity is slated for Thursday.

EUR/USD price forecast
 

EUR/USD continues to plumb the depths of recent bearish momentum, and Fiber is on pace to chalk in a fourth consecutive losing month. The pair has tested the 1.0200 handle for the first time in a little over two years, but the one-sided nature of price action on EUR/USD leaves downside breaks as a sign of continued bearish momentum rather than firm signs of a potential turnaround.

EUR/USD daily chart
 

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