EUR/USD Bulls Eye $1.11 on US Wholesale Inflation and Jobless Claims

It is a busy day ahead for the EUR/USD. Finalized German inflation and euro area industrial production figures for February will be in focus.

After an unexpected surge in German industrial production, investors will expect solid numbers today. Economists forecast industrial production to increase by 1.0% following a 0.7% rise in January.

However, downward revisions to the prelim German inflation numbers could offset the influences of a bullish industrial production report.

Beyond the economic calendar, investors should continue to monitor IMF/World Bank Spring Meeting chatter. ECB President Christine Lagarde will participate.

EUR/USD Price Action

This morning, the EUR/USD was flat at $1.09915. A mixed morning saw the EUR/USD rise to an early high of $1.10050 before falling to a low of $1.09837.

Technical Indicators

The EUR/USD needs to avoid the $1.0967 pivot to target the First Major Resistance Level (R1) at $1.1025. A move through the Wednesday high of $1.10004 would signal a bullish session. However, the EUR/USD needs softer US wholesale inflation numbers and a rise in US jobless claims to support a breakout session.

In the case of an extended rally, the bulls will likely test the Second Major Resistance Level (R2) at $1.1059 and resistance at $1.11. The Third Major Resistance Level (R3) sits at $1.1151.

A fall through the pivot would bring the First Major Support Level (S1) at $1.0933 into play. However, barring a data-fueled sell-off, the EUR/USD pair should avoid sub-$1.09 and the Second Major Support Level (S2) at $1.0875. The Third Major Support Level (S3) sits at $1.0783.

Looking at the EMAs and the 4-hourly chart, the EMAs send bullish signals. The EUR/USD sits above the 50-day EMA ($1.09072). The 50-day EMA pulled further away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above S1 ($1.0933) and the 50-day EMA ($1.09072) would support a breakout from R1 ($1.1025) to give the bulls a run at R2 ($1.1059) and $1.11. However, a fall through S1 ($1.0933) and the 50-day EMA ($1.09072) would bring S2 ($1.0875) and the 100-day EMA ($1.08620) into view. A fall through the 50-day EMA would send a bearish signal.

The US Session

Looking ahead to the US session, it is a busy day on the US economic calendar. US wholesale inflation and jobless claims will be in focus.

Following the softer-than-expected US CPI Report, a hotter-than-expected producer price index would test the theory of a Fed rate pause. However, initial jobless claims should increase modestly to support a hawkish policy outlook.

Investors should also monitor Fed chatter on monetary policy and the US economy.