Ichimoku analysis (4-hour chart)
Tenken-Sen- 1.06976
Kijun-Sen- 1.07231
EURUSD showed a minor pullback ahead of US CPI data. The annual CPI is expected to decline to 6.2%. Any drop in US inflation will drag the US dollar lower. The pair lost its shine after hawkish comments from Fed speakers. It hits a high of 1.07464 at the time of writing and is currently trading around 1.07351.
According to the CME Fed watch tool, the probability of a 25 bpbs rate hike in Feb declined to 90.8% from 96.70% a day ago.
The US 10-year yield pared some of its gains ahead of US CPI data. Any break above 3.78% confirms minor bullishness. The yield spread between 10 and 2-year widened to -81.8 basis points from -46 bpbs.
Technical:
The pair is trading below short-term 21 EMA above 55 EMA, and long-term (200-EMA) in the 4-hour chart. Any break below 1.07000 confirms intraday bearishness; a dip to 1.0600/1.0350 is possible. The near-term resistance is around 1.0780. The breach above will push the pair to 1.08000/1.08850.
Indicator (4-hour chart)
CCI – Bearish
Directional movement index – Neutral
It is good to sell on rallies around 1.0760-65 with SL around 1.0810 for a TP of 1.06000.
