Eurusd rises as euro shows strength amid euro area inflation data

EURUSD Analysis

Performance after Monday
Period	Pct	Chg	Momentum
Monday	1.07%	111 Pips
Week to-date	1.07%	111.3 Pips
March	1.07%	111.3 Pips

Upcoming key events (London Time)

No major events for the day.

What happened lately

In the Euro Area, inflation data for February presented a mixed picture. The Core Harmonized Index of Consumer Prices (HICP) on a month-to-month basis showed a significant increase, climbing to 0.6% from -0.9% in January. This indicates a rebound in core inflation pressures within a month. However, the 12-month HICP flash estimate slightly decreased to 2.4% from January’s 2.5%, reflecting a mild decline in overall inflationary pressures year-on-year. Furthermore, the 1-month HICP also demonstrated a substantial increase of 0.5% from a previous negative value of -0.3% in January. Yet, the Core HICP on a year-on-year basis edged slightly lower from 2.7% in January to 2.6% in February, suggesting a modest moderation in the underlying inflation without the more volatile food and energy prices. Collectively, these figures paint a picture of an economy experiencing short-term inflationary upticks while showing a tempered long-term inflation trend.

The EURUSD currency pair rose by 1.07% to 1.04857 on Monday, reflecting a strengthening of the euro against the U.S. dollar. The Euro Area’s inflation data, with stronger month-to-month core HICP figures, likely contributed to this currency appreciation. The euro’s relative strengthening can be seen as investors possibly anticipating a positive stance or policy adjustment from the European Central Bank (ECB) in response to short-term inflation pressures, despite the slight dip in the annual headline and core inflation figures. With no major economic events lined up for the immediate future, this current inflation data, alongside potential market expectations for ECB’s monetary policy, might continue to support the euro in the near term, thus influencing bullish sentiment towards the EURUSD pair. Nonetheless, traders will be vigilant towards any new data or statements impacting monetary policy that could alter this trajectory.

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What can we expect from EURUSD today?

EURUSD on Monday rose 1.07% to 1.04857. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for EURUSD looks bullish as the pair ended higher after Monday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 1.05301 with break above could target R2 at 1.05745 or figure level area. While towards the downside, we are looking at daily low of 1.03883 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.05036 may suggest continuation after recent positive movement.

For the week to-date, take note that EURUSD is mixed as compared to the prior week.

Key levels to watch out:

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