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EURUSD Spikes Ahead of ECB Meeting Minutes, US CPI, and Lagarde’s Speech

EURGBP
EURGBP

EURUSD found bids at the wake of today’s European session open. The currency pair rose 19 pips to 1.1163 after bottoming at 1.1143 during the Asian session. Can it extend from its gains yesterday with today’s events?

12:30 pm GMT – ECB Meeting Minutes

At noon, the European Central Bank (ECB) will release the minutes of its most recent meeting. If you remember, back in December, the central bank kept rates steady after cutting 10 basis points in November. Market participants will be closely examining the minutes for any clues about when the central bank could make changes to its current monetary policy.

1:30 pm GMT – US Retail Sales

Consumer spending data for December is also due today. It is expected that retail sales for the month grew by 0.3%. Meanwhile, the core reading which excludes volatile items is seen to print at 0.5%. Positive numbers could strengthen the dollar while disappointing figures could weaken it.

6:00 pm GMT – ECB President Lagarde’s Speech

The central bank head is scheduled to speak at a New Year’s reception in Frankfurt. Her remarks about the state of the euro zone economy could spark volatility on the euro. Recently, data from Germany suggests that the euro zone’s largest economy is slowing down. Today’s CPI data, which came in as expected at 0.5% for December, also shows that inflation in the country remains muted. Pessimistic comments about the region’s growth could be bearish for EURUSD.

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EURUSD Outlook

On the 4-hour time frame, the currency pair looks to be testing resistance at yesterday’s highs. A successful bullish close above 1.1162, would set the next near-term resistance at 1.1200 where EURUSD previously made highs on January 6. However, if the initial rally on the currency pair is not sustained, we could see it fall to support at the rising trend line (from connecting the lows of January 10 and January 14). If ECB officials sound more dovish than expected, we may even see a break of trend line support at 1.1140. If this happens, EURUSD could fall to is January 10 lows at 1.1090.