EUR/USD retreats to 1.1450 following disappointing German CPI data
- Annual inflation rises less than expected in Germany.
- US Dollar Index stays calm below 96.50.
With the initial reaction to the CPI data from Germany, the EUR/USD pair pulled away from the weekly highs that it set earlier in the session at 1.1474 and tested the 1.1450 handle. As of writing, the pair was trading at 1.1455, still up 0.25% on the day.
According to the preliminary inflation report published by the Destatit today, the inflation, as measured by the Consumer Price Index (CPI), in Germany is expected to rise 1.7% on an annual basis in December following November's 2.3% reading. This figure also missed the analysts' estimate of 1.9%. "In December 2018, the harmonised index of consumer prices for Germany, which is calculated for European purposes, is expected to increase by 1.7% year on year," the Destatis added in its publication.
Meanwhile, the US Dollar Index, which fell to a fresh weekly low at 96.19 earlier in the day, struggles to make a meaningful recovery and allows the pair to float in the positive territory. At the moment, the DXY is down 0.28% on the day at 96.30.
Later in the session, pending home sales, new home sales, and Chicago PMI will be the last data releases of the year from the United States.
Technical levels to consider
The initial support for the pair aligns at 1.1430 (daily low) ahead of 1.1380 (20-DMA) and 1.1340 (Dec. 26 low). On the upside, resistances could be seen at 1.1465/75 (100-DMA/daily high), 1.1500 (psychological level) and 1.1550 (Oct. 22 high).