EUR/USD Forecast: Near-term bullish bias stays intact above 1.1310

EUR/USD seems to have settled above key technical level.
Hot inflation data from the US helped the dollar limit its losses.
Trading conditions in financial markets thin out on Christmas Eve.

EUR/USD seems to have steadied around mid-1.1300s on Friday as the trading action turns subdued on Christmas Eve. The near-term bullish outlook remains intact for the pair but thin trading conditions are likely to limit the movements in the remainder of the day.

The data published by the US Burau of Economic Analysis revealed on Thursday that the annual Core Personal Consumption Expenditures (PCE) Price Index, the Fed's preferred gauge of inflation, jumped to 4.7% in November from 4.2% in October. This print surpassed the market expectation of 4.2% and helped the dollar stay resilient against its rivals in the second half of the day.

The benchmark 10-year US Treasury bond yield edged higher toward 1.5% after the inflation report and according to the CME Group's FedWatch Tool, markets are pricing a 53.8% probability of a 25 basis points Fed rate hike in March.

EUR/USD Forecast: Near-term bullish bias stays intact above 1.1310 - 1

Bond and stock markets in the US will be closed on Friday and investors will keep an eye on technical levels when they return on Monday.

EUR/USD Technical Analysis

On the four-hour chart, the Relative Strength Index (RSI) indicator is moving sideways around 60, suggesting that sellers are showing no interest in the pair for the time being. Additionally, the last four candles on the same chart closed above the 200-period SMA; confirming the bullish bias in the near term.

Static resistance seems to have formed at 1.1340 ahead of 1.1360 (post-ECB high on December 16) and 1.1380 (November 30 high).

On the downside, support is located at 1.1310 (200-period SMA) and 1.1290 (50-period SMA).

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