• EUR/USD moving sideways after US inflation numbers.
  • Dollar losses momentum near the end of the week ahead of next week’s FOMC meeting.
  • Euro about to post fourth consecutive weekly close near 1.1300.

The EUR/USD peaked at 1.1309 after the release of US inflation data and then pulled back to 1.1270 only to rise back toward the 1.1300 area. The greenback lost momentum late on Friday, after data, amid lower US yields and higher equity prices.

Inflation numbers in the US showed the CPI reached at 6.8%, the highest level since 1982. A different report showed a larger-than-expected increase in Consumer Confidence to 70.4 in December, above the 67.1 expected.

Despite economic number, EUR/USD continues to move sideways, now for two weeks. The pair is about to post the fourth consecutive weekly close around 1.1300 (also the 20-day moving average). It is flat for the day and the week. The main trend is bearish but currently on a consolidation mode.

Key events for next week

In the Eurozone, analyst at ING point out that some signs of life from German industrial production in October will no doubt help the region as well, but broad concerns about input shortages and transportation problems remain. “While October might look reasonable, it doesn’t look like the sideways trend from recent months will end soon. More important perhaps is the December PMI, which will shed light on the impact of the 4th wave of the coronavirus on the economy. With some countries having introduced new restrictive measures, this is the one to look out for.”

In the US, the key event will be the FOMC meeting. Most market analysts expected the central bank to announce an acceleration in the tapering of the purchase program. Analysts also expect changes to rate hike expectation from the Fed staff. Recent inflation numbers, including today’s CPI, and recent comments from Chair Powell speaking no more about “transitory” inflation warrant some action next week that should have an impact across financial markets, including EUR/USD.  

Technical levels

This article was originally published by Fxstreet.com.Read the original article here.

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