EUR/USD remains steady ahead of key US inflation report amid ECB’s officials' comments

• EUR/USD recovers slightly in anticipation of US CPI release, with ECB members' statements weighing on the Euro.
• ECB Vice-President de Guindos hints at possible Eurozone recession, while Schnabel affirms stance on inflation control.
• EUR/USD traders focus on upcoming US inflation figures and unemployment claims.

The Euro (EUR) pares some of its Tuesday’s losses and gains ground versus the US Dollar (USD) on Wednesday in muted trading due to investors expecting the release of the latest inflation figures in the United States (US). Nevertheless, some European Central Bank (ECB) members had crossed the wires, weighing on the shared currency. The EUR/USD is trading at 1.0937, posting minuscule gains of 0.06%.

The shared currency capped by ECB’s officials turning less hawkish, open the door for rate cuts

ECB Vice-President Luis de Guindos commented that the Eurozone’s (EU) economy might have been in recession last quarter, and its prospects look weak. He added, “Soft indicators point to an economic contraction in December, too, confirming the possibility of a technical recession in the second half of 2023 and weak prospects for the near term.” Regarding monetary policy, he supports the current level of interest rates.

Recently, ECB’s member Isabel Schnabel agreed with de Guindo's position about a weaker economic outlook for the EU and emphasized the central bank Is on the right path to curb inflation. She added that geopolitical tensions are one of the upside risks to inflation.

Meanwhile, on the dovish side of the spectrum lies ECB’s Centeno stated the central bank should not wait until May to make policy decisions, while Villeroy added the ECB would cut rates in 2024.

Across the pond, the US economic docket is scarce, with investors awaiting the release of the latest inflation report on Thursday. The Consumer Price Index (CPI) for December is expected to rise to 3.2% YoY, from 3.1% in November, while the Core CPI is foreseen to slow from 4% to 3.8% YoY. At the same time, the US Bureau of Labor Statistics (BLS) would announce the latest unemployment claims report for the week ending January 6.

EUR/USD Price Analysis: Technical outlook

The daily chart portrays the pair in consolidation, capped by the boundaries of last Friday’s high and low each at 1.0998/1.0876, with neither buyers nor sellers able to crack the range. For a bullish resumption, EUR/USD buyers must reclaim the January 9 high of 1.0966, followed by January 8 at 1.0978, ahead of challenging 1.1000. On the other hand, if sellers push prices below the January 9 low of 1.0910, that could open the door to breaching the 1.0900 figure, followed by the 50-day moving average at 1.0885.