EUR/USD Price Analysis: Treads water around 1.0920 ahead of Eurozone HICP data
- EUR/USD extends its gains ahead of inflation data from the Eurozone.
- Technical indicators suggest positive sentiment to aim for the significant level at 1.1050.
- 1.0900 acts as key support followed by the seven-day EMA and the 23.6% Fibonacci retracement level.
EUR/USD attempts to extend its gains for the second consecutive session, hovering around 1.0920 during the Asian hours on Tuesday. The anticipated Harmonized Index of Consumer Prices (HICP) data from the Eurozone on Tuesday is expected to remain unchanged across all levels. This moderate inflation outlook might contribute to the stability of the EUR/USD pair.
However, the technical indicators for the EUR/USD pair suggest a favorable upward trend. The 14-day Relative Strength Index (RSI) maintaining a position above the 50 mark signals positive sentiment, indicating a potential re-test of the psychological resistance at the 1.1000 level, followed by the two-month high at 1.1017.
Moreover, the Moving Average Convergence Divergence (MACD) reinforces the overall positive momentum, with the MACD line positioned above the centerline and the signal line. As a lagging indicator, it signals a confirmation of the potential upward trend.
The prevailing bullish sentiment, supported by the MACD, could empower the EUR/USD pair to surpass the current barrier and aim for a significant level at 1.1050.
Looking at the downside, the psychological support at 1.0900 emerges as a crucial level, followed by the seven-day Exponential Moving Average (EMA) at 1.0893 and the 23.6% Fibonacci retracement level at 1.0884.
Should there be a decisive break below the latter, it might intensify bearish pressure on the EUR/USD pair, leading to a potential move towards the psychological area surrounding the 38.2% Fibonacci retracement at 1.0801.