EUR/USD drops further to test daily pivot ahead of CPIs

EUR/USD’s reversal from six-week tops gained further traction in early Europe, now pushing the rate further below 1.07 handle.

EUR/USD awaits German, Euroland and US CPI data

Currently, the spot now drops -0.26% to 1.0684, wavering within close proximity to the daily lows struck previously at 1.0681 levels. The EUR/USD pair fell back into the red zone after an extensive rally witnessed a day before, as the traders are seen unwinding the Trump trade ahead of the highly-influential US CPI figures due later on Wednesday.

The US dollar experienced a double whammy and was sold-off aggressively amid a GBP shorts-squeeze and Trump’s caution over a stronger USD, which tempered hopes of a fiscal stimulus and weighed dramatically on the US treasury yields across the time horizon.

Focus now shifts towards the fundamentals from both continents, with the inflation data release to dominate the moves in EUR/USD in the day ahead. The German CPI data will be published before the Eurozone final CPI reading, while the US CPI, industrial production and Fedspeaks will wrap up an eventful economic calendar for today.

EUR/USD Technical Levels

In terms of technicals, the pair finds the immediate resistance 1.0700 (round figure). A break beyond the last, doors will open for a test of 1.0746 (Nov 17 high) and from there to 1.0776 (100-DMA). On the flip side, the immediate support is placed at 1.0654 (5-DMA) below which 1.0612 (10-DMA) and 1.0556 (50-DMA) could be tested.