The EUR/USD currency pair hit its highest level since January over the past week, climbing to a high of 1.2266 before running into resistance, and now remains in a tight trading range ahead of key data from the Eurozone this week starting with the release of CPI figures later today.
The number is expected to come in at 0.9, well ahead of last month’s figure of 0.7 that shows the Eurozone is continuing to recover from the devastating effects of the coronavirus which has decimated the economy over the past year.
One of the main sticking points preventing the currency pair from reaching the January high of 1.2350 is expectations that the Fed will begin to tighten monetary policy by lifting interest rates off record lows but that still seems some time away and may already be priced into the market.
From a technical perspective, the uptrend that began in early March is still intact and apart from a brief selloff last Friday, the bulls remain firmly in control which has kept the price trending upwards.
We may see the currency pair make another run for the top of the channel to around 1.2281 over the coming days in the absence of any negative unexpected news to hit the market.
The bottom line of the channel shows clear support for now and any attempt to break down through the bottom line is likely to be met with strong resistance and the chances of falling below yesterday’s low of 1.2181 seem fairly remote.