German CPI Preview: What to Expect of EUR/USD?

The EUR/USD pair is seen struggling to take on the recovery from near hourly 100-SMA above 1.0600 levels, as resurgence of broad based USD buying keeps a lid on the prices. Attention now turns towards the German CPI report due ahead of the US open for fresh incentives on the EUR.

Softer regional y/y CPI readings point to a downbeat nationwide print

The German inflation data is up for release later this session, with the CPI figures expected to tick lower to +0.1% in Nov, versus +0.2% growth seen a month ago, while adding 0.8% annually, compared to the 0.7% result reported in Oct.

Germany's regional CPIs released earlier today painted a bleak picture of the harmonized German CPI report, with Brandenburg inflation for the month of Nov MoM coming in at +0.1% vs +0.2% prev, while the YoY was +1.0% vs 0.9% prev. In Hesse, MoM came in at 0.0% versus +0.3% prev, while YoY remained unchanged at +0.8%, as prev. Meanwhile, in Bavaria, the MoM came in at 0.0% vs 0.2% prev, with YoY at +0.8% as expected. 

However, the German CPI report is expected to have limited reaction on the EUR/USD pair, as the main risk event for today remains the US GDP data, while Fedspeaks will also remain in the spotlight.

EUR/USD Technical Levels

At 1.0597, the pair finds the immediate resistance 1.0621 (daily pivot). A break beyond the last, doors will open for a test of 1.0685 (weekly high) and from there to 1.0700 (round figure). On the flip side, the immediate support is placed at 1.0561 (Nov 28 low) below which 1.0535 (Nov 25 low) and 1.0515 (multi-month low) could be tested.