EUR/USD Price Forecast: Bullish bias remains above 1.1600 ahead of ECB and US inflation

The EUR/USD pair attracts fresh buyers during the Asian session on Wednesday, though it lacks bullish conviction and remains confined within the weekly range. Spot prices currently trade near the 1.1630 region, up around 0.05% for the day, as bulls opt to wait for the European Central Bank (ECB) meeting and crucial US inflation figures.

A 25 basis point (bps) rate hike by the ECB on Thursday is considered a done deal, suggesting that the focus will be on the central bank's outlook amid elevated inflation risks. Traders will then confront the release of the US Producer Price Index (PPI) and the Consumer Price Index (CPI) on Thursday and Friday, respectively, which might offer cues about the Federal Reserve's (Fed) policy path. In the meantime, September Fed rate hike bets remain in play, which, along with geopolitical uncertainties, could support the US Dollar (USD) and cap gains for the EUR/USD pair.

From a technical perspective, spot prices hold a constructive short-term bias above the 200-period Exponential Moving Average (EMA) on the 4-hour chart, at 1.1579, and the 38.2% Fibonacci retracement of the 1.1323–1.2072 upswing at 1.1609. Moreover, the Relative Strength Index (RSI) near 58 and a slightly positive Moving Average Convergence Divergence (MACD) reading hint that bullish momentum persists, though not in overstretched territory.

Meanwhile, initial resistance is aligned at the 50.0% retracement at 1.1698, followed by the 61.8% level at 1.1786, with higher barriers at 1.1912 and the 1.2072 swing high. On the downside, immediate support is seen at the 38.2% retracement at 1.1609, ahead of the 200-period EMA at 1.1579. A convincing break below these would expose the 23.6% retracement at 1.1500 and the 1.1323 cycle low.

EUR/USD 4-hour chart