EURUSD Consolidates with Euro Zone CPI Data and Powell’s Testimony Due Later Today

EURUSD is trading around its opening price in today’s Asian session. As of this writing, the currency pair is trading at 1.1240 which is only 1 pip below its opening price. With a few euro zone data and Fed Chairman’s Powell’s speech scheduled today, will we see volatility on EURUSD pick up?

At 10:00 am GMT, the headline CPI figure for the euro zone is expected to print at -0.1%. Meanwhile, the core reading of the report is seen to come in at 0.8%. Positive figures could be bullish for EURUSD while negative readings could weigh down on the currency pair.

Then at 5:30 pm GMT, Fed Reserve Chairman Jerome Powell is due to testify before the House Financial Services Committee. He is expected to report on the central bank’s efforts to support the economy during the coronavirus pandemic. It is also anticipated that he will share his outlook for the economy. If he sounds pessimistic and that more easing is needed, the dollar could weaken and push EURUSD higher. On the other hand, if he sounds optimistic, the dollar could gain ground and drag EURUSD lower.

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EURUSD Outlook

On the 4-hour time frame, it can be seen that EURUSD has been making higher lows and lower highs. Consequently, a symmetrical triangle chart pattern has formed. When you enroll in our free forex trading course, you will learn that this is considered a neutral indicator, that is, until the market breaks out.

With that being said, you should keep tabs on the area around today’s Asian session highs at 1.1286. A strong close above this price could invalidate resistance at the top of the triangle. It could mean that there may be enough buyers in the market to push EURUSD to its June 23 highs at 1.1347.

On the other hand, a strong close below today’s Asian session lows at 1.1214 may indicate the presence of sellers. This could invalidate support at the bottom of the triangle and constitute a downside break. With this, we could see further weakness on EURUSD and the currency may soon retest its previous lows at 1.1166 where it bottomed on June 19.

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