EUR/USD off highs, still comfortable above 1.1600 post-US data; German CPI next

   •  US Core PCE price index at 1.3% y-o-y. 
   •  Personal income +0.4% & personal spending +1.0%
   •  USD corrective slide unabated after data, German CPI next.

The EUR/USD pair held on to its modest recovery gains and had a rather muted reaction to today’s US economic releases.

The pair remained in a narrow range below mid-1.1600s after data released from the US showed core PCE price index matched consensus estimates and rose 1.3% on a yearly basis. 

The US Dollar, however, failed to gain any positive traction despite better-than-expected personal spending data, coming-in to show a growth of 1.0% in September (0.8% expected), and in-line personal income data. 

With the US economic data out of the way, traders would now take cues from the prelim German CPI print for October. Against the backdrop of last Thursday's dovish ECB taper, today's inflation data is unlikely to be a game changer for the pair ahead of this week’s FOMC and NFP data. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes, "the 1.1660 level, which contained declines for over two months, is a critical resistance, and the pair will be bearish as long as below it. Beyond it, however, next resistances are the mentioned 20 SMA at 1.1690, followed by the 1.1710/20 region."

"Supports today come at 1.1610, and 1.1574, the low settled last Friday. Given current market mood and the upcoming big US events, including Fed's meeting and the Nonfarm Payrolls report, seems unlikely that the pair would break below it at the beginning of the week" she adds.