From early December, the EUR/USD pair rose from a low of 1.1712 and reached a high of 1.2556 on February this year. From early January, as shown below, the pair has moved in a horizontal zig zag pattern, establishing strong support and resistance areas.
Today, the pair is in retreat mode as traders wait for inflation data from the United States. As you know, this is possibly the most important data for markets because it helps them project the future of hikes. The data comes a few days after the country released the jobs numbers that showed accelerated hiring, but stagnant wages.
Today, analysts expect the core CPI to slow to 0.2% and at an annualized rate of 1.8%.
As such, the pair is likely to move higher if inflation data retreats and move lower if inflation accelerates. Markets will be on the watch for the 1.2556 and the 1.2152 level.