EUR/USD Price Analysis: Euro Edges Lower with Focus on CPI

• Investors were mostly on the sidelines ahead of the US inflation report

• Investor morale in the eurozone reached its highest level since May.

• US consumers’ short-term inflation expectations dropped to the lowest level in nearly three years.

On Tuesday, the EUR/USD price analysis revealed a subtle bearish tone, with investors opting to remain on the sidelines as the market braces for the impending US inflation report. Moreover, there was little reaction to the US and Eurozone data on Monday. 

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A survey revealed that investor morale in the eurozone reached its highest level since May. However, a full recovery for the 20-country currency bloc is uncertain.

In January, Sentix’s index for the eurozone increased to -15.8 points from December’s -16.8. However, Sentix cautioned that this may not signify a turnaround for the eurozone, mainly due to Germany’s ongoing recession.

Meanwhile, the expectations index rose to -8.8 points in January from -9.8 in December. The index reflecting the current situation in the eurozone also rose, reaching -22.5 in January.

Meanwhile, in the US, the New York Fed disclosed that US consumers’ short-term inflation expectations dropped to the lowest level in nearly three years in December. According to the Survey of Consumer Expectations, inflation one year from now will likely be at 3%, the lowest reading since January 2021. According to the report, inflation three years from now will be at 2.6%, down from 3% in November. Additionally, five years from now, price pressures were projected to be at 2.5%, down from 2.7% in November.

EUR/USD key events today

The pair will likely consolidate as investors do not expect high-impact news from the Eurozone or the US.

EUR/USD technical price analysis: Price oscillates within 1.1000-1.0900 boundaries

On the technical side, EUR/USD ranges between the 1.1000 resistance and the 1.0900 support levels. This consolidation comes after a solid bearish leg to the 1.0900 key support level.

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Although the price went above the 30-SMA, it seems ready to return below. Still, for bulls to reverse the trend, the price must break above 1.1000 to start making higher highs. Otherwise, it will keep consolidating until the previous downtrend continues with another leg lower. If the price breaks below the 1.0900 support, it will likely retest the 1.0750.

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• Source: https://www.forexcrunch.com/blog/2024/01/09/eur-usd-price-analysis-euro-edges-lower-with-focus-on-cpi/