EUR/USD Poised for Breakout Ahead of US Inflation Data and ECB Decision
The EUR/USD pair remains in a tight range ahead of key macro events, including US inflation data and the European Central Bank's interest rate decision. The pair has formed a symmetrical triangle pattern on the four-hour chart, with two lines nearing their confluence level.
The upcoming US producer and consumer inflation reports are expected to show inflation above the 2% target, which could raise the odds of a Federal Reserve interest rate hike. The European Central Bank is also expected to hike interest rates by 25 basis points to battle elevated inflation.
According to technical analysis, the EUR/USD pair has dropped from its year-to-date high of 1.1710 in August and moved slightly below the 23.6% Fibonacci Retracement level at 1.1626. The Percentage Price Oscillator (PPO) has moved above the zero line, indicating a bullish breakout potential.