EUR/USD headed for highest daily close in more than a year above 1.14

The EUR/USD pair continued to push higher in the NA session on Thursday and reached its highest level since early May (2016) at 1.1445. As we approach the end of the day, the pair is trading at 1.1440, up 60 pips, or 0.55%, on the day. In the meantime, the US Dollar Index is headed for its lowest daily close in nine months as it sits at 95.30 (-%0.5). 

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Although the shared currency gained some additional lift on the back of higher-than-expected preliminary inflation figures from Germany in the early NA session, the majority of the daily gains occurred later after Federal Reserve Bank of St. Louis President James Bullard gave his remarks in a speech in London. Bullard claimed that inflation breakevens were suggesting that the Fed was being too hawkish and the FOMC members were thinking that the inflation was not moving towards the 2% target rate as fast as initially thought.

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Tomorrow's economic calendar will feature Consumer Price Index, which is expected to ease to 1.2% in June from 1.4% in May, from the euro area ahead of Core Personal Consumption Expenditure Price Index, Fed's favorite inflation gauge, and Personal Income/Spending from the U.S. 

Tomorrow will be the last trading of the first half of 2017 and the fact that the EUR/USD pair was able to gain nearly 250 pips during the week could trigger a large profit-taking. Moreover, in a recent report, Bloomberg said that offers are in place at 1.1450, according to traders in Europe.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, writes, "...with the 4 hours chart showing that the 20 SMA continues heading north below the current level, but still lagging behind price, currently around 1.1320, while the RSI indicator presents a moderate bullish slope around 87, as the Momentum retreats modestly, still within overbought levels. Overall, the risk remains towards the upside, with the market now determinate to test the 1.1460 region, a major static resistance that capped advances pretty much since January 2015. Beyond it, the pair has scope 1.1494, October 2016 monthly high, before correcting."

According to the analyst, supports are located at 1.1380, 1.1345 and 1.1300, while resistances align at 1.1460, 1.1495 and 1.1530.