The euro started Thursday on a strong note, but ultimately ended the day little changed due to US dollar price action. Ultimately, EUR/USD remains contained to a fairly well-defined range on a short-term and long-term basis. In the short-term, resistance sits at 1.2800 while support sits at near 1.2690. On a longer-term basis, resistance looms at 1.3000 while support rests at 1.2500. Meanwhile, economic news was mixed, as German unemployment levels rose by 40,000, marking the fourth straight increase, which pushed the unemployment rate up to a 9 month high of 7.9 percent. Meanwhile, GfK consumer confidence for the Euro-zone largest economy rose for the sixth straight month to 2.6 in March, but since this is the initial reading, there is potential for revisions. Looking ahead, Eurostat inflation estimates for the Euro-zone have shown that CPI may have fallen to a 1.1 percent annual pace during January, which would mark the lowest since 1999 but more importantly, remains below the European Central Bank’s 2.0 percent inflation target. If Eurostat confirms this at 5:00 ET, the euro could pull back, especially ahead of the ECB's expected rate cut on March 5. On the other hand, if CPI is higher than anticipated, the currency could gain as the markets will speculate that the central bank may pause in their efforts to make monetary policy more accommodative.
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