#EURUSD @ 1.05563 gains some positive traction on Tuesday amid a modest USD downtick. (Pivot Orderbook analysis)

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• EUR/USD gains some positive traction on Tuesday amid a modest USD downtick.
• A generally positive risk tone undermines the safe-haven buck and offers support.
• The upside seems limited ahead of the US CPI and the crucial central bank meeting.

The pair currently trades last at 1.05563.

The previous day high was 1.058 while the previous day low was 1.0506. The daily 38.2% Fib levels comes at 1.0534, expected to provide support. Similarly, the daily 61.8% fib level is at 1.0552, expected to provide support.

The EUR/USD pair attracts fresh buying on Tuesday and sticks to its modest intraday gains through the early European session. Currently placed around mid-1.0500s, spot prices, however, remain confined in a familiar range held over the past one-and-half week or so as traders await this week’s key macro data and central bank meetings.

Market participants will confront the release of the latest US consumer inflation figures later during the early North American session on Tuesday. The crucial US CPI report will play a key role in driving the US Dollar demand and provide some impetus to the EUR/USD pair ahead of the highly-anticipated FOMC monetary policy decision on Wednesday. This will be followed by the European Central Bank (ECB) meeting on Thursday, which should determine the next leg of a directional move for the major.

In the meantime, the easing of COVID-19 curbs in China remains supportive of a generally positive risk tone. This, in turn, is seen undermining the safe-haven buck and offering support to the EUR/USD pair. That said, worries about a deeper global economic downturn should keep a lid on the optimism. This, along with the uncertainty about the Fed’s rate-hike path, might hold back traders from placing fresh bearish bets around the USD and act as a headwind for the major, at least for the time being.

In fact, market participants seem convinced that the US central bank will slow the pace of its policy tightening and have been pricing in a relatively smaller 50 bps lift-off in December. That said, the incoming positive US economic data has been fueling speculations that the Fed might lift rates more than recently projected. Apart from this, diminishing odds for another supersized 75 bps rate hike by the European Central Bank (ECB) should contribute to capping gains for the EUR/USD pair.

Even from a technical perspective, the recent range-bound price action and repeated failures near the 1.0600 mark warrant some caution for aggressive bullish traders. Hence, it will be prudent to wait for strong follow-through buying before positioning for any further appreciating move for the EUR/USD pair. Traders on Tuesday will now look to the release of the German ZEW Economic Sentiment Index for short-term impetus, though the focus will remain glued to the closely-watched US CPI report.

Technical Levels: Supports and Resistances

EURUSD currently trading at 1.0552 at the time of writing. Pair opened at 1.0536 and is trading with a change of 0.15 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.0421, 50 SMA 1.0114, 100 SMA @ 1.0068 and 200 SMA @ 1.0351.

The previous day high was 1.058 while the previous day low was 1.0506. The daily 38.2% Fib levels comes at 1.0534, expected to provide support. Similarly, the daily 61.8% fib level is at 1.0552, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.0501, 1.0466, 1.0427
• Pivot resistance is noted at 1.0575, 1.0615, 1.065

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