Eurozone inflation data may boost EUR/USD
Eurostat is scheduled to publish the flash estimate of the Eurozone Harmonized Index of Consumer Prices (HICP) for November at 10:00 GMT this Tuesday. The preliminary report is expected to show that headline inflation rose by 2.1% year-on-year, while the core HICP is projected to edge up to 2.5% from 2.4% in October. On a monthly basis, the October readings stood at 0.2% for headline inflation and 0.3% for the core.
Inflation data released on Monday showed no immediate threat of price acceleration in major Eurozone economies such as France, Spain, and Italy. However, German inflation surprised to the upside, reinforcing the case for a policy hold by the European Central Bank (ECB). If Tuesday’s HICP figures come in stronger than expected, the euro could gain traction and help EUR/USD extend its more than one-week-old bullish momentum.
Conversely, a softer print may not trigger a sharp reaction, given the prevailing bearish sentiment surrounding the US Dollar. This weakness in the dollar continues to act as a tailwind for the EUR/USD pair. Moreover, diverging policy expectations between the ECB and the Federal Reserve suggest that the path of least resistance for EUR/USD remains upward.
On the geopolitical front, the President of the United States is expected to engage in diplomatic talks with Russian President Vladimir Putin in Moscow on Tuesday, aiming to advance proposals to end the war in Ukraine. This follows recent negotiations in Florida, where Ukrainian negotiator Rustem Umerov reported significant progress.
However, US Secretary of State Marco Rubio emphasized that more work is needed to reach a resolution. Ukrainian President Volodymyr Zelensky continues to seek support from European allies amid concerns that the US proposal may overly favor Moscow’s interests. These developments keep geopolitical risks alive and may indirectly support the euro through safe-haven flows.
From a technical perspective, the 100-day Simple Moving Average (SMA) slopes downward, indicating a muted broader trend. Price remains below this level, keeping the near-term bias defensive. The MACD stands above the signal line in positive territory, with the histogram rising—suggesting improving bullish momentum. The Relative Strength Index (RSI) at 55 reflects neutral-to-firm conditions.
The 100-day SMA at 1.1644 currently caps the upside. A failure to break above this level would preserve downward pressure. Below it, sellers maintain control, and any rebound may stall against dynamic resistance. However, a decisive close above the SMA could unlock further gains and shift the bias higher. The MACD’s positive tone reinforces buyer interest, and the RSI suggests room for extension if price reclaims the average.