EURUSD in wait-and-see mode

FX:EURUSD   Euro / U.S. Dollar
The EURUSD pair continues to oscillate around the 1.23 level since last week, with the immediate obstacle for bulls is the 20-DMA which is now below 1.2350. The single currency obviously lacks the upside impetus and drivers to show a more consistent trading. However, the pair may receive the catalyst which will help it to decide on the direction, at least, in the short term.
On Wednesday, the euro area CPI numbers are due. Core inflation is expected to have accelerated to 1.1% from 1.0% YoY in March. CPI is forecast to increase by 1.4% from 1.1%. Should the consumer prices really show a faster growth, the euro will get a bullish boost as strong inflation numbers is the key precondition for the ECB to exit stimulus and start raising interest rates.
Another key event for EURUSD this week is Friday’s US NFP report. The dollar could rally if employment and earnings increase as it will be a signal for stronger inflation . Therefore, the volatility in the pair may increase substantially during this week and the euro may break the current trading range. On the upside, the key is the 1.2350 hurdle. A break above will open the way to the next bullish target 1.2420. Meanwhile, below 1.2280 the price will slide to 1.2240 and 1.22.


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