EUR/USD remains steady above 1.1800 as the market awaits the release of the Eurozone's Consumer Price Index (CPI) and US economic data. The pair has struggled to capitalize on the previous day's modest bounce, oscillating in a narrow band during the Asian session on Wednesday. Spot prices currently trade around the 1.1815 zone, nearly unchanged for the day. The preliminary estimate of the Harmonized Index of Consumer Prices (HICP) is expected to show a slight decline in January, which could influence the shared currency and provide some impetus to the EUR/USD pair. However, the European Central Bank (ECB) views this as a temporary deviation, suggesting no immediate adjustments to monetary policy. The market's immediate focus, however, is on the highly anticipated ECB policy meeting on Thursday, which will play a key role in driving the EUR/USD pair in the near term. Meanwhile, a slight deterioration in global risk sentiment offers some support to the safe-haven US Dollar (USD) and acts as a headwind for the currency pair. The growing acceptance that the US Federal Reserve (Fed) will cut rates two more times in 2026 could cap the USD and support the EUR/USD pair. This warrants caution before positioning for an extension of the EUR/USD pair's pullback from the highest level since June 2021, touched last week. The Harmonized Index of Consumer Prices (HICP) measures changes in the prices of a representative basket of goods and services in the European Monetary Union. The HICP, released by Eurostat on a monthly basis, is harmonized because the same methodology is used across all member states and their contribution is weighted. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish. The next release is scheduled for Wednesday, February 4, 2026, at 10:00 (Preliminary).
