EUR/USD comfortable above 1.23 handle post-German CPI, US data next

   •  Prelim German CPI falls short of expectations but does little to weaken EUR.
   •  A modest USD retracement extends support and helps limit downside.

The EUR/USD pair struggled to build on its recovery move from an early European session low level of 1.2296 and once again retreated from 1.2335 level. 

The shared currency met with some fresh supply after the preliminary release of German consumer prices showed rising inflationary pressure in the Euro-zone's largest economy, albeit at a slower than expected pace. 

In fact, the headline CPI is expected to rise by 0.4% m-o-m and the yearly rate came in at 1.6% in March, missing consensus estimates pointing to a reading of 0.5% and 1.7% respectively.

Meanwhile, a modest US Dollar weakness, following yesterday's GDP-led strong up-move to over week tops, extended some support and helped limit any further downside. Traders now look forward to the US economic docket for some fresh trading impetus.

Technical outlook

Valeria Bednarik, American Chief Analyst at FXStreet writes: “Technically, the EUR/USD pair is short-term bearish, given that in the 4 hours chart, is developing below all of its moving averages, while technical indicators remain near oversold territory, although without directional strength, indicating that speculative interest is not quite sure on where to go next.”