EUR/USD supported at 1.23 but stays vulnerable to the downside

• EUR/USD might be vulnerable to further downside losses.
• Next week will see the Consumer Price Index in the Eurozone 

The EUR/USD is trading at around 1.23 as it is about to close the day on Thursday little changed while most market participants are away on the Easter break. 

Today’s price action is mainly revolving around the 1.23 handle as bulls and bears are trading in a smaller-than-usual 50-pip range while the EUR/USD usually as an average daily range of 90 pips. 

As the EUR/USD seems to stubbornly stay stuck at the 1.23 level, next week’s Eurozone inflation data could provide some clear directionality to the pair, if traders don’t unlock the situation in the meantime.   

The worse-than-expected German inflation data earlier in the European session didn’t help revive the Euro bulls as the single currency is slowly sliding lower. Earlier in the week, the US Dollar got a boost from end-of-quarter and end-of-month profit-taking as well as an improving US-China tariffs conflict. The better-than-expected US Gross Domestic Product also added some fresh positive US Dollar sentiment. Additionally, the North Korea talking about denuclearization is also seen as a positive sign for the economy as a whole.

EUR/USD daily chart

Earlier in the week, the EUR/USD failed just a little below the 1.25 level and now closed below the 50-period simple moving average. While the overall trend is up the bull case seem less and less compelling. The EUR/USD has been ranging since February and repeatedly failing at the 1.25 handle and there might be a time when bulls will likely be tired to take that trade. The wedge bull flag is currently failing to materialize in a strong breakout above 1.25 which was on Tuesday rejected yet again. Technically, it seems that the last thing bulls are relying on is a bull trendline and the last swing lows at 1.2240 and 1.2160. The market will gauge if the European and US macroeconomic data next week, after the Easter holiday, can bring some fresh impetus to the EUR/USD pair. Both readings on the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) indicators are not especially constructive for imminent higher prices. 

EUR/USD 4-hour chart

If the EUR/USD manage to break to the downside there seem to be little support before 1.225 last swing low. A break of 1.225 would likely open the gates to 1.215 swing low. Bulls will likely meet resistance at the 1.235 level which sees a convergence of the 50, 100 and 200-period simple moving averages as well as the powerful 50% Fibonacci retracement level from the previous leg higher from the March 20-27 bull leg. If the bulls can successfully reclaim 1.2350 and keep the momentum going above 1.24 resistance then the market is probably in for another retest of the 1.25 handle.