Flat lines below 1.1200 ahead of German consumer inflation data

• EUR/USD has no firm intraday direction and remains limited in a multi-day range.
• The mixed technical setup calls for caution before positioning for the short-term trajectory.
• Traders look to flash German CPI for a boost ahead of Fed Chair Powell’s speech.

EUR/USD is struggling to capitalize on Friday’s modest rebound from the 1.1125-1.1120 support zone and is starting the new week on a moderate note. Spot prices are currently trading around the 1.1160 area, largely unchanged for the day, as traders look forward to the release of flash German consumer inflation numbers and Federal Reserve (Fed) Chairman Jerome Powell’s speech for fresh impetus.

Technically, the EUR/USD pair remains limited in a multi-day trading band. Against the backdrop of the recovery from the psychological 1.1000 or monthly low, this range rejection price action could be classified as a bullish consolidation phase. This, along with positive oscillators on the daily chart, suggests that the path of least resistance for spot prices remains up.

That said, the recent repeated failures to build on momentum or find acceptance above the 1.1200 round figure constitutes the formation of a bearish double-top pattern and warrants some caution for bullish traders. This makes it prudent to wait for a sustained breakout in the aforementioned short-term trading range before confirming and positioning for the next leg of a directional move for the EUR/USD pair.

Meanwhile, the 1.1200 mark could continue to act as an immediate obstacle ahead of the 1.1215 region, or a 14-month high reached last Wednesday. Some further buying will be seen as a new trigger for the bulls and lift EUR/USD to the 1.1275 region, or the July 2023 high. The momentum could extend beyond the 1.1300 mark, towards the 1.1335 region on the way to the 1.1375 area and the round number of 1.1400.

On the other hand, weakness below the immediate 1.1125-1.1120 support could drag the EUR/USD pair below the 1.1100 threshold towards a test of last week’s low around the 1.1085-1.1080 area. Further decline could expose the 50-day simple moving average (SMA) near the 1.1030 area, before spot prices eventually decline to the 1.1000 level, which, if broken, will change the short-term trend in favor bear traders.

EUR/USD daily chart