The EUR/USD pair trades in the 1.0890 price zone, up on Wednesday amid the broad US Dollar weakness. The Euro got an extra boost from macroeconomic figures, as the Euro Zone (EU) Harmonized Index of Consumer Prices (HICP) rise by less than anticipated in January, up at an annualized pace of 8.5% in January. The preliminary estimate indicates that inflationary pressures receded further at the beginning of the year after peaking last October at a multi-decade high of 10.6%.

Ahead of the US Fed decision, the EUR/USD pair has flirted the 1.0900 level but has been unable to extend gains beyond it. The daily chart shows that the pair is up for a second consecutive day, although the upward strength is limited. The pair is developing above a bullish 20 SMA, which provides dynamic support at around 1.0795. At the same time, the 100 SMA is about to cross above the 200 SMA in the 1.0300 area. Finally, the Momentum indicator keeps heading lower, approaching its 100 line, while the Relative Strength Index (RSI) regained the upside and currently stands at around 64. The risk skews to the upside, although with central banks in the way, anything can happen.

In the near term, and according to the 4-hour chart, the pair is developing above a flat 20 SMA, which reflects the consolidative phase the pair is undergoing since mid-January. The longer moving averages, however, head higher below the shorter one, in line with the wider long-time bullish stance. Finally, technical indicators crossed their midlines into positive territory, heading modestly higher.

EURUSD in the mood for further breakouts

Feb 01 2023