EUR/USD remains offered above 1.0600, little move after US data.

• The EUR/USD pair maintains its slightly positive tone and reacts little to mixed US macroeconomic data.
• From an aggressive line, the Fed’s expectations continue to act as a tailwind for the dollar and limit increases.
• Recent range-bound price developments advise caution before making directional bets.

The pair EUR/USD it remains comfortably above the 1.0600 mark in the early North American session and barely reacts to the US macroeconomic data.

The US Bureau of Economic Analysis reported that the personal consumption expenditure (PCE) price index rose a modest 0.1% in November, disappointing expectations for a 0.3% reading. The slight disappointment, however, was offset by an upward revision to the previous month’s reading, to 0.4%, and a higher-than-expected 5.5% annual rate.

Additional data showed that the core PCE price index (the Fed’s preferred inflation gauge) rose 0.2%m/m in November, slowing to 4.7%/yr from 5.0% previously. Elsewhere, US durable goods orders missed consensus estimates by a wide margin and failed to impress dollar bulls or boost the EUR/USD pair.

That said, renewed speculation that the Fed will maintain its ultra-aggressive stance to rein in inflation continues to act as a tailwind for US Treasury yields. This should help limit losses for the dollar and limit the rises of the EUR/USD pair. The mixed fundamental background warrants some caution before making further directional bets.

Even from a technical perspective, the pair has been oscillating in a familiar trading range for the last week or so. This further points to indecision among traders, so it is prudent to wait for a sustained move in either direction in order to confirm the near-term path for the EUR/USD pair.

Technical levels to watch