Crude Risks Larger Pullback As Oil Prices Initiate Bearish Sequence

rude Risks Larger Pullback as Oil Prices Initiate Bearish Sequence.

EUR/USD pares the decline from earlier this week as the 4Q Euro-Zone Gross Domestic Product (GDP) report showed the growth rate expanding an annualized 2.7% to outpace the U.S. economy, and the pair may continue to gain ground over the next 24-hours of trade should the Consumer Price Index (CPI) boost the outlook for underlying inflation.

Even though the headline reading is expected to slow to an annualized 1.2% in January, a pickup in the core CPI print may keep the Euro afloat as it encourages the European Central Bank (ECB) to move away from its easing-cycle. Positive developments coming out of the monetary union may keep President Mario Draghi and Co. on course to end the quantitative easing program in September, and the central bank may start to adopt a hawkish tone over the coming months as ‘the latest economic data and survey results indicate continued strong and broad-based growth momentum at the turn of the year.’

At the same time, Governing Council officials may continue to jawbone the Euro ahead of the next meeting on March 8 as the exchange rate trades at the highest level since 2014, but the broader shift in EUR/USD behavior may continue to unfold in 2018 as the central bank starts to taper the quantitative-easing (QE) program.

EUR/USD Daily Chart