Euro remains constructive ahead of US inflation data
The Euro keeps positive tone early Wednesday and extends recovery after Tuesday’s bounce generated initial signal on formation of bullish engulfing pattern on daily chart.
This generates an initial signal of a higher low at 1.0832 (low of shallow pullback, reinforced by rising 20DMA) and keep intact larger bulls off 1.0760/70 higher base (Mar 8/15) for retest of initial barriers at 1.0947/73 (falling 100WMA / Apr 4 high), violation of which would open way towards 1.1000 (psychological) and 1.1032 (2023 high).
The notion is supported by bullish daily studies, with near-term action to remain biased higher while holding above 1.0832.
US inflation report is key event today and will be closely watched for fresh direction signals.
The single currency would come under pressure if March figures show that core inflation remains elevated, which would revive expectations for extended tightening cycle by Fed.
On the other hand, fresh risk appetite could be expected if underlying inflation falls, which would open the door for the Fed to start preparations for lowering interest rates.
Res: 1.0947; 1.0973; 1.1000; 1.1032
Sup: 1.0902; 1.0856; 1.0832; 1.0788