#EURUSD @ 1.05469 is expected to show further weakness below 1.0540 as US inflation has rebounded. (Pivot Orderbook analysis)

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• EUR/USD is expected to show further weakness below 1.0540 as US inflation has rebounded.
• Higher-than-anticipated US consumer spending resulted in an intense sell-off in the US equities.
• ECB Lagarde has reiterated that a 50 bps interest rate hike announcement is on the table.

The pair currently trades last at 1.05469.

The previous day high was 1.0614 while the previous day low was 1.0536. The daily 38.2% Fib levels comes at 1.0566, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.0585, expected to provide resistance.

The EUR/USD pair is juggling in a narrow range above 1.0540 in the early Asian session. The major currency pair is likely to show more weakness after surrendering the immediate support of 1.0540 ahead. The downside bias for the shared currency pair is escalating after a surprise rebound in the United States Personal Consumption Expenditure (PCE) Price Index. A revival in the households’ spending in January has propelled the expectations that the Federal Reserve (Fed) will continue hiking rates till summer.

Investors dumped US equities after a higher-than-anticipated jump in consumer spending in January fueled the risk of more policy tightening by Fed chair Jerome Powell in March. S&P500 futures settled the week with losses of around 2.60%, portraying a risk-aversion theme.

Fed’s preferred inflation tool reported a surprise jump to 4.7% vs. the consensus of 4.3% and the former release of 4.7% on an annual basis. Consumer spending has jumped by 0.6% in January against a jump of 0.4% recorded in December. A strong employment cost index due to the tight labor market has fueled consumer spending due to higher funds with households for disposal.

The US Dollar Index (DXY) looks set to reclaim the critical resistance of 105.00 ahead amid the risk-off market mood. Meanwhile, rising expectations of more policy tightening by the Fed sent US Treasury yields higher. The return provided on 10-year US government bonds scaled to near 3.95%.

On the Eurozone front, European Central Bank (ECB) President Christine Lagarde reiterated the need for further interest rate hike by 50 basis points (bps) in March. ECB Lagarde cited “More tightening will be required if fiscal cooperation is absent.” She further added ”There is every reason to believe that we will do another 50 basis points in March.”

Technical Levels: Supports and Resistances

EURUSD currently trading at 1.0547 at the time of writing. Pair opened at 1.0547 and is trading with a change of 0.0 % .

The pair is trading below its 20 Daily moving average @ 1.073, below its 50 Daily moving average @ 1.0726 , above its 100 Daily moving average @ 1.0451 and above its 200 Daily moving average @ 1.0331

The previous day high was 1.0614 while the previous day low was 1.0536. The daily 38.2% Fib levels comes at 1.0566, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.0585, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.0517, 1.0488, 1.0439
• Pivot resistance is noted at 1.0596, 1.0644, 1.0674

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