EUR/USD showed a lack of significant movement, with bids hanging around the 1.0300 price level. The currency pair has been largely flat, as traders wait for further cues. The economic data on Thursday didn’t provide much in the way of fresh insights, with German Harmonized Index of Consumer Prices (HICP) inflation figures coming in line with expectations. Retail Sales data for December showed some moderation, with the headline figure increasing by 0.4% MoM, slightly below the market forecast of 0.6%. Core Retail Sales excluding automotive expenditures met expectations with a 0.4% MoM increase.
Key Data Points:
German HICP inflation: In line with expectations, offering no surprises for the market.
Retail Sales: Moderated to 0.4% MoM in December from a revised 0.8% in November, but still largely in line with expectations.
Core Retail Sales: Rose by 0.4% MoM, matching analyst forecasts.
Given the mixed data, there was little change in investor sentiment in either direction.
Outlook for Friday:
On the European side, non-preliminary HICP inflation figures for the broader eurozone are due, with a slight increase to 2.8% YoY expected from 2.7%.
On the US side, traders will be watching Housing Starts, Building Permits, and Industrial Production figures for December. These are expected to come in close to prior figures, suggesting that they may not drive significant volatility.
EUR/USD Technical Forecast: EUR/USD has remained in a consolidation phase for the past two days, with bids stuck around the 1.0300 level. After testing the 1.0200 level last week and marking a fresh 26-month low, the pair has struggled to recover significantly. With the bearish momentum from the past few months still lingering, EUR/USD remains on track for a potential fourth consecutive month of declines.
Support and Resistance Levels: The key technical level to watch remains 1.0300, with potential support at lower levels. Any significant bullish recovery seems unlikely unless a substantial catalyst emerges.
Overall, EUR/USD is caught in a consolidation phase, and market participants are waiting for a stronger catalyst, possibly from central bank commentary or upcoming data, to break the current price action.
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