The euro is trading around 1.1195 at a key resistance level, and during the European session it attempted to break above 1.12 but was unsuccessful.

The euro is in a critical zone. A decisive break above the downtrend channel formed since October 5 could signal a buy above 1.1200, with targets at the 2/8 Murray level around 1.1352 or around the 200 EMA at 1.1366.

Conversely, a drop below 1.1190 could be a clear signal to sell, as there is strong resistance in this zone. During the European session, the EUR/USD pair attempted to break through this level but was unsuccessful.

In the coming hours, U.S. inflation data will be released, and we believe that a reading that is encouraging for the U.S. economy could weaken the euro, causing it to fall toward the lows of 1.1150 and 1.1115 (S_3 daily).

Conversely, if the data is positive, we expect the euro to gain upward momentum and reach the 1.1352 level, and it could even reach the 200 EMA around 1.1366.

It is important to note that following a price movement triggered by fundamental news, the price always returns to the levels at which it was trading prior to the news. Therefore, if an upward or downward movement occurs, we should wait to buy or sell with a target at the price level at which it was trading before the fundamental news.