Euro Drops on Weak PMI and CPI Data, Trades Sideways Before NFP

The  euro today largely traded sideways against the  US dollar following yesterday’s significant recovery from lows last witnessed in  mid-December. However, despite the  recovery, analysts are still predicting that the  euro is likely to  be in  a  bearish trend for  most of  January.
The  EUR/USD currency pair today traded in  a  range between a  high of  1.1419 and  a  low of  1.1382 as  markets waited for  direction.
The  currency pair today headed lower following a  deluge of  mostly negative PMI releases from across the  eurozone by  IHS Markit. The  Markit France services PMI came in  at  49.0 missing expectations by  0.7, while the  Markit Germany services PMI was recorded at  51.8 versus the  expected 52.5. The  Markit eurozone services PMI also missed expectations by  coming in  at  51.2 versus the  expected 51.4 print. Only the  Markit Italy services PMI beat expectations by  a  0.4 margin. The  release of  the  latest German unemployment change data by  the  Federal Statistical Office had a  muted impact on  the  currency pair, despite the  prints being within expectations.
The  release of  the  eurozone inflation data for  December by  Eurostat triggered a  decline by  the  pair. The  headline CPI print came in  at  an  annualized 1.6% missing expectations by  0.2%, while the  core CPI print met expectations by  coming in  at  1.0%. The  producer price index data for  November also missed expectations contributing to  the  decline.
The  currency pair’s short-term performance is set to  be influenced by  the  release of  the  US non-farm payrolls data later today.
The  EUR/USD currency pair was trading at  1.1412 as  at  11:29 GMT having rallied from a  low of  1.1382. The  EUR/JPY currency pair was trading at  123.22 having risen from a  low of  122.63.

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