Euro Tests Key Levels Ahead of Inflation Data

EUR/USD

The euro has retreated from its previously reached highs. The 1.12000 level provided strong resistance to buyers, and after testing it twice, the price has corrected to 1.1100. This level has already offered support to the pair last week, so for now, we are seeing range-bound trading between 1.1200-1.1090.

What scenarios could unfold in the upcoming trading sessions?

If the price breaks and holds below 1.1090, a full-fledged downward correction could develop, with a decline towards 1.1050-1.0980.
If the price consolidates above 1.1200, the upward momentum could resume, with a rise towards 1.1400-1.1300.

Technical analysis of EUR/USD suggests the potential for a deeper downward retracement, as a “bearish harami” pattern has formed on the daily timeframe.

Key fundamental factors that could influence the pair’s price:

Today at 10:15 (GMT +3:00): Speech by European Central Bank member Isabel Schnabel.
Today at 12:00 (GMT +3:00): Eurozone Consumer Confidence Index release.
Today at 15:30 (GMT +3:00): German Consumer Price Index (CPI) release.
Today at 15:30 (GMT +3:00): US Q2 GDP data release.

Read analytical EUR/USD price forecasts for 2024 and beyond.

EUR/CAD

Technical analysis of the EUR/CAD pair also indicates range-bound trading, but within a wider corridor. Two weeks ago, the price surged and tested key resistance at 1.5200. It failed to consolidate above on the first attempt, and the pair dropped to 1.4970. Last week, buyers made another attempt to break through 1.5200, but again without success. Currently, the price is trading at the lower boundary of the four-week range between 1.5220-1.4970.

A move below 1.4970 could trigger a resumption of the downward movement and a test of 1.4880. Consolidation above 1.5200 could lead to a new upward impulse towards 1.5600-1.5400.

Key events for the pair tomorrow:

Tomorrow at 10:55 (GMT +3:00): German Unemployment Rate release.
Tomorrow at 15:30 (GMT +3:00): Canadian GDP release.