- The EUR/USD pair is bullish. Only a new lower low activates more declines.
- The Rising Wedge pattern was violated.
- The Canadian CPI could also bring strong action on the EUR/USD pair.
The EUR/USD price changed little in the short term as the traders wait for the Canadian inflation data before taking action. The Consumer Price Index is expected to report a 0.6% drop in the last month versus the 0.1% growth in the previous reporting period. This is seen as a high-impact event and could greatly impact the USD.
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In addition, the Canadian Core CPI, Common CPI, Median CPI, and Trimmed CPI will also be released. The US Empire State Manufacturing could be reported at -8.7 points versus -11.2 points in December.
Despite temporary retreats and consolidations, the EUR/USD pair maintains a bullish bias. Fundamentally, the Euro received a helping hand from the Eurozone data earlier today. The ZEW Economic Sentiment was reported at 16.7 points versus the -14.3 points expected.
In comparison, the German ZEW Economic Sentiment came in at 16.9 points even if the traders expected the indicator to remain in the negative territory at -15.0. Moreover, the German Final CPI exceeded expectations at -0.8%.
The US retail sales data, PPI, and Core PPI could significantly impact the EUR/USD pair tomorrow.
EUR/USD price technical analysis: Ranging tightly
The EUR/USD pair is trapped between the 1.0801 and 1.0836 levels. It has escaped from a potential Rising Wedge pattern. However, a larger drop still needs strong confirmation.
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Now, it challenges the ascending pitchfork’s upper median line (UML). This stands as dynamic support. Technically, a new lower low, a valid breakdown below the 1.0800 psychological level, may result in more declines toward the 1.0750 psychological level and down to the median line (ml).
This scenario could activate the Rising Wedge reversal pattern. Though, staying above 1.0801 and jumping above 1.0836 validates further growth.
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