EUR/USD continues to hover around 1.1600-mark, US inflation figures eyed

• EUR/USD at stone's throw from 1.1600, US inflation number may provide momentum.
• Multiple factors like ECB's dovish stance, new COVID-19 cases push the euro southwards.
• The single currency awaits Germany inflation figure, ECB's Elderson speech to provide fresh impetus.

The EUR/USD eases below 1.1600 level during the early Asian session on Wednesday. At the time of reporting, the single currency was trading at 1.1592, up by 0.01% for the day so far. The spot ranged from a low of 1.1569 to a high of 1.1609 overnight, ending slightly higher on the day. The euro may continue a similar trend today or decline further in the coming days on multiple factors. Major central banks could push against the market expectations for tighter monetary policies and fears of economic slowdown would be expected to hamper the euro's progress.

Earlier this month, the European Central Bank president, Christine Lagarde, renewed her dovish stance. Therefore,  the markets are betting for an interest rate hike in the second half of the following year. However, the absence of any words on rate hikes have pushed the euro southwards, and this condition may subside. 

In addition to this, on Monday, ECB chief economist Philip Lane said that tightening monetary policy to temper the current bout of inflation in the eurozone would be counterproductive. However, top ECB supervisor Andrea Enria said on Tuesday that low ECB interest rates were now hurting bank margins. Also, the rising number of new COVID-19 cases in the European region has pushed investors on edge, resulting in the decreasing EUR/USD. 

The pair may derive impulse in the coming days as investors wait for Fedspeak and US stimulus to derive impetus. Also, ECB's Frank Elderson's speech, inflation figures for Germany and Bundesbank Weidmann can affect the pair near term moves. 

Meanwhile, the US dollar is trading at 93.96 and it may rebound to hit the 94 and above level on the back of a weaker US Treasury yield at 1.43% 

EUR/USD technical support/resistance levels

The daily chart shows the initial resistance to the upside resistance remains at the 21-day Simple Moving Averages (SMA). The next barriers to the upside are at the 50, the 100 and the 200-day SMA, i.e., 1.1670, 1.1740 and 1.1887, respectively.

The support level of October 13, 1.1527 can be tested. If it breaks, the psychological levels 1.1500 and 1.1400 lie below.

The pair's Relative Strength Index (RSI) level recovers but stays below the 50-line barrier and holds ground in the short term. The Moving Average Convergence Divergence (MACD) has a bullish vibe while the euro has an unimpressive print.