EUR/USD Forecast: Euro Recovery Could Pick Up Steam After German Inflation Data
After closing in positive territory on Friday, EUR/USD continues to edge higher and trades above 1.0300 in the European morning on Monday. Regional and nation-wide inflation data from Germany could drive the Euro's valuation later in the session.
Euro PRICE Last 7 days
The table below shows the percentage change of Euro (EUR) against listed major currencies last 7 days. Euro was the weakest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.90% | 0.96% | -0.03% | -0.15% | -0.22% | 0.05% | 0.67% | |
| EUR | -0.90% | 0.05% | -0.96% | -1.09% | -1.19% | -0.89% | -0.28% | |
| GBP | -0.96% | -0.05% | -1.00% | -1.14% | -1.24% | -0.95% | -0.33% | |
| JPY | 0.03% | 0.96% | 1.00% | -0.13% | -0.14% | 0.24% | 0.78% | |
| CAD | 0.15% | 1.09% | 1.14% | 0.13% | -0.08% | 0.27% | 0.82% | |
| AUD | 0.22% | 1.19% | 1.24% | 0.14% | 0.08% | 0.30% | 0.92% | |
| NZD | -0.05% | 0.89% | 0.95% | -0.24% | -0.27% | -0.30% | 0.62% | |
| CHF | -0.67% | 0.28% | 0.33% | -0.78% | -0.82% | -0.92% | -0.62% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
The improving risk mood heading into the weekend made it difficult for the US Dollar (USD) to find demand and helped EUR/USD erase a portion of its weekly losses on Friday.
Early Monday, US stock index futures trade marginally higher on the day, not allowing the USD to stay resilient against its rivals.
Inflation in Germany, as measured by the change in the Consumer Price Index (CPI), is forecast to rise to 2.4% on a yearly basis in December from 2.2% in November. In case the CPI rises at a stronger pace than expected, the Euro could gather strength. Investors will also pay close attention to regional CPI figures from Germany. If these data arrive generally higher than anticipated, this could be seen as a sign pointing to a positive surprise in the headline print and provide an early boost to the Euro.
On Tuesday, Eurozone inflation data and ISM Services PMI report from the US could influence EUR/USD's action.
EUR/USD Technical Analysis
(Click on image to enlarge)
The Relative Strength Index (RSI) indicator on the 4-hour chart recovered to 50, reflecting the loss of bearish momentum. Additionally, EUR/USD closed the last 4-hour candle above the 20-period Simple Moving Average (SMA).
On the upside, 1.0350 (static level), could be seen as first resistance before 1.0400-1.0410 (static level, 100-period SMA) and 1.0440 (static level). Looking south, supports could be spotted at 1.0300 (static level, round level), 1.0240 (static level) and 1.0200 (static level).
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