EURUSD AT ELEVATED LEVELS AHEAD OF MAY INFLATION DATA

The EURUSD is trading around the 1.1170 region, just below the weekly high ahead of key eurozone inflation data for the month of May, which is expected to show a slowdown in inflation across Europe.

At present, two main themes are currently driving the direction of EURUSD pair. Firstly, rumours that the European Central Bank will taper down the current quantitative easing package at the June meeting are contributing to euro dip buying. Secondly, the U.S dollar remains well bid on positive domestic economic data, as the Federal Reserve are expected to raise interest rates when they meet at their next meeting on June 14th.

Short term indicators are currently neutral for the EURUSD, with the pair trading in a narrow range between 1.1168 to 1.1180. A clear break above 1.1180 should provoke buying towards 1.1200, with a break below 1.1168 likely to provoke selling to the recent pullback low at 1.1154.

Medium term indicators highlight the importance of the H4 20 period moving average at 1.1172 today. A multi time frame close below this level may provoke selling towards the next H4 support at 1.1085, which is the H4 100 period average.

Upside resistance for the EURUSD is currently located at 1.1205 and 1.1235.