EUR/USD hovers around 1.07, awaits US data

The EUR/USD is trading in the sideways manner around 1.07 as investors await US CPI data and Yellen speech.

The currency pair rose to a high of 1.0720 on Tuesday; its highest since December 8, on the back of broad based USD weakness.

Eyes US CPI release

The consumer price index (CPI) is seen improving to 2.1% annually from the last reading of 1.7%. The core figure is expected to tick up to 2.2% from the prior 2.1%.

A strong headline figure may do little to help the battered US dollar, as much of the rise in the headline figure is likely to be fuelled by an uptick in the energy prices. However, an uptick in core inflation could offer support to the US dollar.

Yellen speech due later today during the market hours could include comments on the monetary policy outlook. In the meantime, German and Eurozone CPI release could receive little attention from the markets, unless the final print shows a significant deviation from the preliminary numbers.

EUR/USD Technical Levels

A break above the previous day’s high of 1.0720 could yield a rally to 1.0768 (Dec 7 high), above which the psychological level of 1.08 could be put to test. On the other hand, a breakdown of support at 1.0685 (Jan 12 high) would expose support at 1.0652 (5-DMA) and 1.0627 (Jan 10 high).