Technical Outlook: EURUSD Remains Biased Lower, EU Inflation Data In Focus

The Euro stands at the back foot in early Friday’s trading and probes below 1.23 handle, focusing initial support at 1.2259 (22 Feb low).

Recovery attempts on Thursday were limited by 30SMA that kept bearish near-term bias in play, despite positive daily close.

Bearishly aligned daily techs along with hawkish Fed and benign ECB minutes weigh on Euro.

EU inflation data are in focus today. Forecasts are pointing to soft numbers (Jan CPI m/n -0.9% f/c vs 0.4% prev, Core y/y 1.0% f/c vs 1.2% prev) which could add to persisting pressure.

Below 1.2259, key supports lay at 1.2210/05 (20-d lower Bollinger band/09 Feb low) and 1.2173 (Fibo 38.2% of 1.1553/1.2555 ascend), break of which is needed to confirm reversal and trigger deeper correction.

Alternative scenario requires close above 30SMA (1.2342) to sideline immediate downside risk, while firm break above converged 10/20SMA’s (1.2366) is needed to neutralize and shift near-term focus higher.

Res: 1.2342, 1.2366, 1.2407, 1.2442
Sup: 1.2279, 1.2259, 1.2235, 1.2205