EUR/USD Faces Key Resistance Ahead of CPI-Led Data Session
EUR/USD gains cautiously as markets prepare for a slew of Eurozone data, led by CPI figures, which could shape the pair's near-term direction. With the USD slightly weaker and no significant U.S. data releases, the focus is squarely on the Eurozone’s economic outlook. Positive momentum indicators and coiling moving averages suggest a potential pause in the October-November downtrend, with resistance at last week's 1.0610 top and the 21-DMA at 1.0624. A daily close above this level would signal strength heading into next week.
Technical Overview: EUR/USD at a Crossroads
Technically, EUR/USD is at a crossroads. The stalled downtrend and contracting Bollinger bands imply reduced volatility, though bears remain in control below the 1.0624 resistance. Initial supports lie at this week’s 1.0425 low and November’s 1.0331 bottom. Upside potential remains constrained unless significant Eurozone data surprises to the upside, which could shift the bearish momentum.
FX Option Signals and Market Sentiment
FX option signals suggest cautious optimism for EUR/USD bulls. The retracement in downside risk reversal premiums highlights reduced expectations of sharp declines. However, with key barriers cleared between 1.0450 and 1.0350, further losses could be more gradual, reflecting a grind rather than a steep descent. Eurozone CPI will likely determine whether EUR/USD can build on its recent stability or succumb to renewed bearish pressure.