EUR/USD is falling back toward 1.0850 after soft Spanish HICP inflation data, reversing from the weekly top in the European session on Wednesday. The pair justifies the market’s anxiety ahead of the top-tier German inflation and the US jobs data.

The Fibonacci 23.6% retracement level of the most recent downturn and the 4-hour chart’s 100-period Simple Moving Average (SMA) are aligned at 1.0900, where the EUR/USD was last seen trading. Prior to 1.0960-1.09970 (Fibonacci 38.2% retracement, 200-period SMA), 1.0930 (static level) could serve as temporary resistance if the pair moves above that level and confirms it as support.

Meanwhile, EUR/USD broke out of the descending regression channel and the Relative Strength Index (RSI) indicator climbed above 50, reflecting the bullish shift in the near-term technical outlook.

Prior to 1.0820 (20-period SMA, upper limit of the descending channel) and 1.0800 (psychological level, mid-point of the descending channel), there is immediate support on the downside at 1.0840 (50-period SMA).

EUR/USD started to move sideways above 1.0850 midweek after posting strong gains on Tuesday. The pair’s near-term technical outlook points to a bullish tilt as investors await the inflation report from Germany and private sector employment data from the US.

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The US Bureau of Labor Statistics revealed on Tuesday that there were 8.8 million fewer job opportunities on the final business day of July than there were on the same day in June, putting the US Dollar (USD) under significant selling pressure. This figure revealed easing labor market circumstances as it came in substantially lower than the market assumption of 9.46 million.

Euro price today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the US Dollar.

Early Wednesday, the data from Germany revealed that annual Consumer Price Index (CPI) in North Rhine-Westphalia rose 5.9% in August, compared to 5.8% increase recorded in July. According to Reuters, the probability of a 25 basis points hike in the European Central Bank’s (ECB) key rates in September climbed to 60% from around 50% the day before after this data. Meanwhile, the annual CPI in Spain increased 2.6% in August after rising 2.3% in July.

The CPI in Germany is forecast to rise 6.2% on a yearly basis in August. A higher reading could help the Euro gather strength against its rivals by attracting additional hawkish ECB bets.

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The US economic docket will feature ADP Employment Change for August. Employment in the private sector is expected to rise 195,000 following the impressive 324,000 increase recorded in July. A disappointing print at or below 150,000 could confirm the loss of momentum in the US labor market and trigger another bout of USD selloff, while another reading close to 300,000 could have the opposite impact on the currency’s performance ahead of Friday’s highly-anticipated August jobs report.


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