EUR/USD steady near 1.16 as traders brace for US inflation data

• EUR/USD `pair trades at 1.1617, up marginally after bouncing from 1.1585 low.
• Dollar posts modest 0.05% gain as investors await Friday's CPI; headline and core seen above 3%.
• US Existing Home Sales rose 1.5% MoM to 4.06M, beating expectations.

EUR/USD holds firm during the North American session on Thursday, as the Dollar post modest gains of over 0.05% as market participants wait for the release of September's US inflation data. At the time of writing, the pair trades at 1.1617 after hitting a low of 1.1585.

Muted price action persists amid thin data and cautious tone ahead of key CPI print

A scarce economic docket in both sides of the Atlantic witnessed the release of tier 2 data, with Existing Home Sales in the US for September rising above estimates, in month-over-month figures.

The White House announced that US President Donald Trump's will meet hits Chinese counterpart Xi Jinping on Thursday in South Korea, but first he will reunite with the new Prime Minister of Japan Takaichi on Tuesday, followed by a meeting with the South Korea President on Wednesday.

The EUR/USD pair ignored most of the data as traders' attention turned to US trade rhetoric towards China, as the US government shutdown extended to its twenty third day, Traders await the release of US Consumer Price Index (CPI) data for September, which is expected to show that headline and core CPI jumped above 3%.

In Europe, Consumer Confidence in October improved to -14.2, up from the previous value of -14.9.

Daily market movers: EUR/USD to remain subdues, waiting for US CPI

• The US Dollar Index (DXY), which tracks the performance of the buck's value against a basket of its rivals, is up 0.06% at 98.94, capping the EUR/USD's advance.
• Market participants are waiting for the release of US CPI ahead of next week's Federal Reserve monetary policy decision. Headline and core CPI are expected to come slightly hot at 3.1% YoY. Although the Federal Reserve's policy-setting focus has shifted from inflation to the jobs market, the numbers will be closely watched.
• The US central bank is expected to cut rates 25 basis points to the 3.75% - 4% range, with traders already pricing an additional 0.25% reduction for the December meeting.
• Overnight, European Central Bank official Kazaks said "it may well be the case that the next rate move could as easily be a hike as a cut" - comments which contrast with Villeroy, who said that a cut more likely than hike and Kocher sees an equal chance.
• Regarding trade news, French President Macron has reportedly been calling on the EU to use its strongest trade tool, the Anti-coercion instrument, against China.

Technical outlook: EUR/USD consolidates, but slightly bullish

EUR/USD's technical setup has improved slightly but remains neutrally biased as the pair trades beneath the confluence of the 20-day and 100-day Simple Moving Averages (SMAs) at 1.1653 and 1.1658 respectively. The Relative Strength Index (RSI) has slipped below the neutral 50 level, signaling that bearish momentum is strengthening.

Key support lies at 1.1600, followed by 1.1550 and 1.1500. A decisive move below this area, would expose the August 1 cycle low near 1.1391. On the upside, resistance remains clustered at the 20- and 100-day SMAs, with a break above 1.1700 opening the door to 1.1800 and the July 1 high at 1.1830.