EUR/USD traded slightly lower Monday after rallying toward the up trend's recent highs but the broader rally may resume and take out key impediments if the dollar weakens on U.S. November CPI and the Fed meeting.
EUR/USD has made several rallies towards 1.0600 and been rejected.
The level has been tough to crack as protective offers ahead of a likely 1.0600 barrier have been too much for bulls to overcome.
Just above that level lies another key impediment.
The 38.2% Fibo of the January 2021-Setpember 2022 1.2349-10.9528 decline sits at 1.0605 and has helped to stall EUR/USD rallies.
November headline CPI USCPI=ECIUSCPNY=ECI is expected to be lower than October, which would reinforce views inflation is moderating and disinflation is developing.
An as-expected or below-estimate result could put downward pressure on U.S. rates and the dollar.
Moderating inflation nS0N32P062 could lead to a less hawkish Fed when its meeting ends on Wednesday, which should increase the probability of 2023 rate cuts EDM3EDZ3.
A EUR/USD rally through the barrier should trigger Fibo stop buying.
Resistance near 1.0800 and 1.0950 would then come into focus.
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