EUR/USD capped below 1.0800 despite thin gains

The EUR/USD pair found some room higher but still lacks upside momentum. Final German HICP and CPI inflation brought no surprises.

US CPI inflation, EU GDP figures slated for next week. The EUR/USD found some room on the high side on Friday, continuing a near-term recovery. However, the pair remains firmly planted on the low side of technical barriers and remains pinned below the 1.0800 price handle.

German inflation figures brought nothing new to the table, confirming initial flash prints, and an adjustment by the US Bureau of Labour Statistics made anticipated changes to how seasonal adjustment is calculated in US Consumer Price Index figures. Markets jostled after the BLS adjustment, but US inflation figures saw little change, keeping markets on-balance for Friday.

Germany’s final Harmonized Index of Consumer Price (HICP) showed no changes from preliminary prints, with the annualized German inflation rate through January holding at 3.1%.

The US BLS made changes to how seasonal adjustment works for US CPI numbers, with a slight rise in annualized inflation getting offset by a near-term decline after calculations got adjusted.
Next week brings a fresh print of US CPI inflation, with the YoY CPI through January expected to tick down from 3.4% to 3.0%. US CPI inflation slated for Tuesday, European Gross Domestic Product (GDP) figures due Wednesday.

Pan-European GDP growth is expected to remain pinned in low territory. YoY quarterly EU GDP is forecast to print at 0.1%, in-line with the previous annualized quarterly print.

Technically; the pair struggles to grow legs beneath technical recovery. The pair also remains pinned on the south side of the 200-hour Simple Moving Average just beneath 1.0800.

Although the pair continues to recover into the upside from the early week’s bottom near 1.0725, topside momentum remains capped, with longer-term technical patterns remaining decidedly bearish.