US Dollar rebound pulls Euro back from day’s high ahead of German HICP data

• Euro slips towards 1.1188 from 1.1215 as a recovering US Dollar trims its gains.
• July-September US GDP growth exceeded projections.
• October’s flash German HICP release is in sharp focus for investors.

Most of the Euro’s (EUR) early advance against the US Dollar (USD) has faded on Friday, with EUR/USD unable to build on gains beyond 1.1215. Despite the pullback, the pair remains 0.11% higher at around 1.1188 during European trading.

Behind the pair’s retreat is a recovery in the US Dollar, which has recouped most of its earlier losses. Robust economic growth in the United States (US), alongside concerns over high inflation, has reinforced the case for a December interest rate hike by the Federal Reserve (Fed).

Having rebounded from an intraday low of 101.59, the US Dollar Index (DXY) is trading near 101.72 at the time of writing, still down 0.1%. The index measures the Greenback against six major currencies.

Thursday’s preliminary US Gross Domestic Product (GDP) release for Q3 surpassed expectations. According to economists at Commerzbank, the economy “expanded strongly by 3.4% in the third quarter of 2026,” as the advance Q3 GDP estimate stood at “3.4% qoq annualised (Bloomberg consensus: 3.2%) vs 2.2% in Q2.” Explaining the strength, they observe that “private consumption was the main driver and expanded 3.8%, at the same pace as Q2,” with a significant contribution also coming from “business investment, particularly in IT,”.

At the same time, annual US core PCE inflation accelerated from August’s 3% to 3.1%, matching expectations. This measure, a preferred inflation gauge of the Fed, excludes volatile food and energy components and is reported on a Year-on-Year (YoY) basis.

For the Euro, attention now turns to Germany’s preliminary Harmonised Index of Consumer Prices (HICP) figures for October, due at 13:00 GMT. Expectations point to headline HICP inflation easing to 3.1% Year-on-Year (YoY), compared with September’s 3.3%.

EUR/USD Technical Analysis: Can the Pair Reclaim Its Short-Term EMA?

A mildly bearish short-term bias persists on the daily chart, where EUR/USD trades at 1.1199, below its 20-period exponential moving average (EMA) of 1.1223. Failure to recover this short-term average indicates that upside potential remains constrained for now. Although the Relative Strength Index (RSI) has recently stabilised after oversold readings, its level of 42 remains below the neutral 50 threshold, signalling muted bullish momentum.

The 20-period EMA near 1.1223 provides the first resistance on the upside. Continued rejection at that level would likely keep the bearish bias intact, favouring either more consolidation or another test of recent lows. Easing that pressure would require a decisive daily close above the average, which would pave the way for a stronger corrective rebound. Momentum indicators would then be likely to improve alongside the price recovery.

(An AI tool assisted in writing this story’s technical analysis. Learn more.)