The Euro (EUR) inched higher against the US Dollar (USD) on Monday, increasing the price of EURUSD to more than 1.2150 following some key economic events. The technical bias has turned bullish because of a higher high in the recent upside rally.
EUR/USD Technical Analysis
As of this writing, the pair is being traded near 1.2198. On the upside, a hurdle may be noted around 1.2200 (a short-term horizontal resistance area as well as psychological number) ahead of 1.2276 (a major horizontal resistance) and then 1.2300 (the psychological number). The technical bias shall remain bullish as long as the 1.0839 support area is intact.
On the downside, a support can be noted around 1.1632 (a key horizontal support) ahead of 1.1629 (the low of the last major downside move) and then 1.1600 (the confluence of horizontal support as well as psychological number) as demonstrated in the given above chart.
US Consumer Price Index
Underlying U.S. consumer prices recorded their largest increase in 11 months in December amid strong gains in the cost of rental accommodation and healthcare, bolstering expectations that inflation will gain momentum this year.
The Labor Department said its Consumer Price Index excluding the volatile food and energy components rose 0.3 percent last month also as prices for new motor vehicles, used cars and trucks and motor vehicle insurance increased.
That was the biggest advance in the so-called core CPI since January and followed a 0.1 percent gain in November. Core CPI increased 1.8 percent in the 12 months through December, picking up from 1.7 percent in November. Economists polled by Reuters had forecast core CPI rising 0.2 percent month-on-month and holding steady at 1.7 percent on an annual basis.
Considering the overall technical and fundamental outlook, selling the pair around current levels may be a good strategy in short to medium term.