EUR/USD deflates to daily lows near 1.2340 ahead of US CPI

• EUR gives away earlier gains.
• USD picks up pace and recovers the positive ground.
• US CPI, retail sales coming up next

The shared currency has given away initial gains vs. the greenback on Wednesday, now forcing EUR/USD to re-visit the area of 1.2345/40, or fresh daily lows.

EUR/USD attention to US data

After two consecutive daily advances, the pair seems to have met a strong hurdle in the upper-1.2300s earlier today, motivating sellers to step in and drive spot lower to the current 1.2340 region.

On the other hand, the buck is recovering the smile following a pick up in the buying interest, lifting the US Dollar Index (DXY) to the area of session peaks in the boundaries of 89.80.

Later in the NA session, USD should stay under the microscope in light of the upcoming US inflation figures for the month of January. The release has grown in importance as of late in response to the latest non-farm payrolls figures, where ‘wage-inflation’ improved above expectations.

EUR/USD levels to watch

At the moment, the pair is losing 0.03% at 1.2348 facing the immediate support at 1.2339 (21-day sma) seconded by 1.2206 (low Feb.9) and finally 1.2165 (low Jan.18). On the flip side, a break above 1.2393 (high Feb.14) would target 1.2524 (high Feb.1) en route to 1.2537 (2018 high Jan.25).