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EUR/USD drifts lower near 1.1455 as investors await German inflation data

Markets are looking for German July HICP to rise 2.8% year over year, after 2.4% previously, which could influence ECB rate-hike expectations.

Reported · Written up by our desk · Major Pairs

The euro edged lower against the US dollar in early European trading, with EUR/USD hovering near 1.1455 as the pair adjusted after a strong recovery over the prior two sessions, according to FXStreet.

FXStreet said investors are waiting for Germany’s flash Harmonized Index of Consumer Prices (HICP) for July, with estimates calling for a year over year increase of 2.8% versus the previous 2.4%. On a monthly basis, the forecast is for headline HICP to rise 0.8% after a 0.2% decline in June, while European and German preliminary Q2 GDP figures are also on the agenda.

FXStreet also pointed to the potential market impact if inflation prints run hot, noting that stronger readings could lift expectations for European Central Bank interest rate hikes. The article said EUR/USD’s near-term bias has improved because the pair is holding above the 20-period exponential moving average, around 1.1422.

On the technical outlook, FXStreet cited a double bottom formation on the daily chart and said bullish hopes could strengthen on a decisive break above 1.1483. It listed support near the 20-period EMA at 1.1422, followed by the July 28 low at 1.1353, while upside extension could target 1.1557 if the 1.1483 level is crossed.

Latest closeEUR/USD 1.147 ▲0.9%

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