Euro struggles to gain momentum on Friday, pares back week’s performance.

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• Euro struggles to gain momentum on Friday, pares back week’s performance.
• A slew of ECB talking points this week have bid down rate cut hopes.
• Next week’s economic calendar is light on eurozone data.
• ECB’s President Lagarde: Rates have probably reached peak, EU not in recession.
• US annual PPI inflation rises to 1% in December vs. 1.3% expected.

The Euro (EUR) is softening on Friday, backsliding against the majority of its major currency peers as dovish talking points from the European Central Bank (ECB) weigh on rate cut hopes. Next week sees limited eurozone data releases, with mid-tier Industrial Production and final Harmonized Index of Consumer Prices (HICP) due in the first half of the week.

A consensus miss on the US Producer Price Index (PPI) is the driving headlines on Friday as producer-level inflation recedes faster than expected. Slumping producer inflation kicked market expectations of Fed rate cuts into overdrive heading into the week’s final trading hours.

The EUR/USD kicked off Friday’s trading near 1.0980, going back and forth in a rough intraday range as the pair grapples with bids near 1.0950. Intraday action continues to get hamstrung on the 200-hour Simple Moving Average (SMA). Near-term chart action is getting drawn into the midrange as the Fiber churns in rough consolidation.

According to daily candles, the pair is doing well, up nearly 5% from October’s bottom bids near 1.0450. Despite a pullback toward the 200-day SMA, a bullish cross of the 50-day and 200-day SMAs is building out a near-term price floor around 1.0900.

Continued selling pressure will drive the Fiber back into the long-term 200-day SMA near 1.0850. The challenge will be to drag the EUR/USD down to the last swing low near 1.0750. Bidders will be looking for topside momentum to carry the pair back into late December’s swing high near 1.1150.

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