EUR/USD regains 1.1000 and beyond, US CPI eyed

The EUR/USD pair is seen building onto its previous rebound above 1.10 handle, with the bulls taking advantage of broad based US dollar weakness amid risk-on market profile.

EUR/USD awaits US CPI for fresh impetus

Currently, EUR/USD rises +0.20% to 1.1020, struggling to extend gains above 1.1030 levels. The main currency pair keeps the bid tone intact, and now consolidates the solid rebound witnessed yesterday after the US dollar slumped across the board, following the release of worse-than expected US industrial production and Empire State manufacturing gauge. Meanwhile, the USD index trades -0.18% lower at 97.68, in close proximity to two-day lows of 97.60.

Markets now eagerly await the US inflation report to confirm that the US economic recovery is losing signs of strength, which could pour cold water on the Fed rate hike expectations. While the main risk event for the spot remains the ECB policy decision due in the second-half of this week.

EUR/USD Technical Levels

In terms of technicals, the pair finds the immediate resistance 1.1027 (daily high). A break beyond the last, doors will open for a test of 1.1050 (psychological levels) and from there to 1.1072 (Oct 12 high). On the flip side, the immediate support is placed at 1.1000 (5-DMA) below which 1.0982 (Oct 13 low) and 1.0954 (3-month low) could be tested.