The EUR/USD currency pair kicked Friday off with a mild rally into the 1.0600 handle as broader markets took advantage of the US holiday session to sell off the greenback and bid up riskier assets, but another contraction in key pan-European inflation figures pulled the plug on EUR/USD bulls. Despite an intraday softening of the euro’s stance, the EUR/USD pair seemed poised for its first weekly gain in a month.According to the Harmonized Index of Consumer Prices (HICP), headline European inflation sank to -0.3% in November, falling from the previous month’s 0.3%. Core HICP inflation also declined to -0.6% month-over-month compared to the previous print of 0.2%, sending core monthly inflation measures into contraction territory for the third time this year and marking the lowest print since February.Annualized HICP inflation ticked higher, with core HICP rising to 2.8% year-over-year from the previous 2.7%, but the bump in yearly inflation is likely due to previous bumps in the road as the European Central Bank (ECB) has grappled with whipsaw inflation prints.ECB officials noted that still-declining inflation metrics could bode well for further rate cuts. Still, too-steep of an inflation easing curve has been raising investor concerns of a deepening slowdown within the broader European economy.
EUR/USD Price Forecast
The euro’s bullish turnaround from two-year lows was running into trouble as intraday bidding ran aground of the 1.0600 handle. Bullish momentum achieved a moderate 2.5% recovery from November’s bottom bids near the 1.0330 mark, but momentum remained limited.Looking higher up, a rapidly-descending 50-day Exponential Moving Average (EMA) fell through the 1.0750 level while the 200-day EMA rolled over into bear country near the 1.0840 figure.
EUR/USD Daily Chart
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