Bullish view
- Buy the EUR/USD pair and set a take-profit at 1.0750.
- Add a stop-loss at 1.0700.
- Timeline: 1 day.
Bearish view
- Set a sell-stop at 1.0630 and a take-profit at 1.0560.
- Add a stop-loss at 1.0735.
The EUR/USD exchange rate moved sideways on Monday and Tuesday morning ahead of the upcoming US Consumer Price Index (CPI) and US GDP data. The pair was trading at 1.0700, where it has been in the past few days. This price has jumped by more than 2.37% from the lowest point in October.
EU GDP and US inflation data ahead
The EUR/USD pair has been in a tight range in the past few days. It has remained in this range after the US published relatively weak non-farm payrolls (NFP) data a day after the Federal Reserve decision.
The data showed that the economy added over 150k jobs in October, a smaller increase in than expected. Also, the unemployment rate jumped to 3.9%. The next important economic data to watch will come out on Tuesday when the US will publish the latest Consumer Price Index (CPI) data.
Economists believe that US inflation drifted downwards in October. The data revealed that the headline CPI dropped from 0.4% in September to 0.1% in October. They also believe that the CPI fell from 3.7% to 3.3%, the lowest level in months.
Core inflation, which excludes the volatile food and energy, is expected to come in at 0.3% and 4.1% on a MoM and YoY, respectively. These numbers will come a day after a report by New York Fed showed that consumer expectations eased in October. Median expectation fell to 3.6% in October from the previous 3.7%.
These numbers, together with the weak US jobs numbers, mean that the Federal Reserve will likely maintain the status quo in its December meeting. Besides, Moody’s decided to downgrade US debt last week.
The EUR/USD pair will also react mildly to the latest European GDP data. Economists expect the data to reveal that the economy contracted by 0.1% in Q3 after expanding by 0.3% in the previous quarter.
EUR/USD technical analysis
The EUR/USD exchange rate moved sideways on Tuesday and was trading at 1.0695. This price was a few points above the crucial support level at 1.0660. It is consolidating at the 25-period and 50-period moving averages. The pair is also between the ascending blue channel.
It has also moved above the 23.6% Fibonacci Retracement level and the median line of the Andrews Pitchfork tool. Therefore, the outlook for the pair is bullish, with the next resistance point to watch will be at 1.0750. This view will be invalidated if the pair drops below the support at 1.0700.
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