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EUR/USD Remains Neutral Sub-1.2200, Bears Would Have Better Chances Once Below 1.2160

EUR/USD Current Price: 1.2173

  • US inflation advanced at its fastest pace since 2008 in May, hitting 5% YoY.
  • The European Central Bank kept its monetary policy unchanged as anticipated.
  • EUR/USD remains neutral sub-1.2200, bears would have better chances once below 1.2160.

The EUR/USD pair ended Thursday with modest losses in the 1.2170 price zone. The pair remained below the 1.2200 and posted a fresh weekly low at 1.2142, barely reacting to first-tier events. The US reported May inflation figures, which were upwardly revised, with the annual CPI hitting 5%, accelerating at its fastest pace since 2008. The core reading resulted at 3.8%, also suffering a sharp upward revision. However, the numbers failed to spur concerns. Stocks edged higher while US Treasury yields returned to weekly lows after a short-lived spike.

Also, the European Central Bank announced its monetary policy decision. As widely anticipated, policymakers left rates and easing unchanged and reiterated that they would continue supporting the economy through their different programs. President Christine Lagarde offered a mixed speech, as she said price pressures remain subdued and that it is too early to discuss tapering. At the same time, the ECB upwardly revised the growth forecast to 4.6% for this year and to 4.7% for the next one.

On Friday, Germany will publish May inflation data, while in the US, the focus will be on the preliminary estimate of the June Michigan Consumer Sentiment Index, foreseen at 84 from 82.9 previously.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair is technically neutral, without signs of an upcoming breakout. The 4-hour chart shows that the pair is contained by directionless moving averages, while technical indicators head nowhere around their midlines. The pair would need to clear the 1.2200 level to gain bullish traction, while bears have better chances on a break below 1.2160.

Support levels: 1.2160 1.2120 1.2070   

Resistance levels: 1.2200 1.2245 1.2280

Image Sourced from Pixabay

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