The EUR/USD currency pair saw minimal gains on Monday, rising slightly from early levels near 1.0770 but struggling to break above the key resistance level of 1.0800. The German final Harmonized Index of Consumer Prices (HICP) inflation figures are set to be released during the European session, but are not expected to cause significant market movement unless there are significant changes from the preliminary data. Additionally, European GDP growth numbers for the first quarter are anticipated to hold steady at 0.3% QoQ.
Meanwhile, in the US, consumer inflation expectations have risen in April, with consumers expecting inflation to accelerate to 3.3% over the next year based on the Federal Reserve Bank of New York’s survey data. Additionally, US Producer Price Index (PPI) inflation figures are set to be released during Tuesday’s US session, with expectations for producer-level inflation in April to increase to 0.3% MoM from the previous month’s 0.2%. This rise in inflation expectations may complicate the path to rate cuts in the US.
In terms of technical analysis, the EUR/USD pair continues to trade towards the upper end of the range after bouncing from the 200-hour Exponential Moving Average (EMA) near 1.0730 last week. However, bullish momentum is limited by a supply zone above the 1.0800 level. Daily candlesticks show the pair facing resistance at the 200-day EMA at 1.0789, with a potential downside towards the last swing low near 1.0600 if the pair fails to break above this level. On the other hand, a breakout above the last swing high below 1.0900 could signal further upside potential.
Looking ahead, market focus will be on the final Euro inflation figures, Fed Chair Jerome Powell’s speech on Tuesday, and the release of US PPI inflation numbers. While the Eurozone data may have some impact on the EUR/USD pair, the US inflation figures and Powell’s speech are likely to overshadow European data and drive market direction in the short term. Traders will be monitoring these key events and their impact on the currency pair’s movement in the coming days.
