1. The next major inflection point in this narrative is likely to be Friday’s release of US PCE data, the Fed’s favored inflation gauge. It is expected to show that core price growth accelerated to a 40-year high of 5.2 percent on-year. By contrast, today’s revised Eurozone CPI print is expected to put core inflation at 2.3 percent.
2. If the Ukraine narrative moderates, such outcomes may encourage EUR/USD lower ahead of the back-to-back ECB and Fed policy announcements in mid-March. Pushing through immediate support levels at 1.1272 and 1.1222 may set the stage for a retest of former resistance from March 2020, anchored at 1.1140.
3. Immediate topside barriers come in at 1.1414 and 1.1495. Making a move through these and securing a foothold back above the recently broken support shelf capped at 1.1552 – with confirmation on a daily closing basis – seems like a pre-requisite for lasting upside follow-through however.
2. If the Ukraine narrative moderates, such outcomes may encourage EUR/USD lower ahead of the back-to-back ECB and Fed policy announcements in mid-March. Pushing through immediate support levels at 1.1272 and 1.1222 may set the stage for a retest of former resistance from March 2020, anchored at 1.1140.
3. Immediate topside barriers come in at 1.1414 and 1.1495. Making a move through these and securing a foothold back above the recently broken support shelf capped at 1.1552 – with confirmation on a daily closing basis – seems like a pre-requisite for lasting upside follow-through however.