EUR/USD forms bullish consolidation ahead of key German data

The EUR/USD is in a tight range ahead of key economic data from the United States and Germany. The pair is trading at 1.2035, which is 0.75% above last Friday’s low of 1.1955.

EUR/USD price action

Important German economic data ahead

This week, the German statistics office will publish several important economic numbers that will have an impact on the EUR/USD price.

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Earlier today, it published the country’s December industrial production data. The production rose to 0.0%, which was lower than the median estimate of 0.3%. This performance was mostly because Germany was tackling the second wave of the virus in December.

On Tuesday, the bureau will publish the German trade numbers for December. Economists expect the data to show that the country’s exports declined by 1% in December after rising by 2.2% in the previous month. They also see the imports rising by about 1%, which will bring the total trade surplus to about 16 billion euros.

On Wednesday, the EUR/USD will react to the German inflation numbers. Economists polled by Reuters expect the data to show that the headline Consumer Price Index (CPI) rose by an annualised rate of 1.0% while the harmonised number rose by 1.6%. 

Finally, on Thursday, the statistics office will publish the wholesale price index (WPI) data, which is also an important measure of inflation.

Meanwhile, the current price action of the EUR/USD price is because of Friday’s US nonfarm payroll data. The Bureau of Labour Statistics said that the US created just 40,000 jobs in January while the unemployment rate fell to 6.3%. This week, the key numbers to watch will be the US inflation that will come out on Wednesday. 

Meanwhile, the Commitment of Traders (CoT) report showed that the non-commercial holders of the euro dropped from 165 to 137.

EUR/USD technical outlook

EUR/USD technical analysis

On the hourly chart, we see that the EUR/USD spiked last week after the US employment numbers. The pair is trading at 1.2040, which is slightly below the important resistance at 1.2060. It is also slightly above the 25-day and 15-day exponential moving averages (EMA) and is also forming a bullish flag pattern. Therefore, the pair will likely bounce back higher as bulls target the next resistance at 1.2087.

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