• EUR/USD sees choppy declines as 1.0900 slips away.
• European inflation vexes rate cut hopes.
• Markets pivot toward Friday’s US NFP.

EUR/USD dipped and recovered in a rough Thursday session, grinding lower in whipsaw action as the pair tests new lows in the near-term and slips further back from key technical levels.

European inflation declined less than markets were hoping, but currency markets have shifted into shorting the US Dollar (USD) across the board as investors recover from Wednesday’s hawkish showing from the US Federal Reserve (Fed).

Investors will be looking toward Friday’s US Nonfarm Payrolls (NFP) print for signs that the US economy will start to decay enough to force the Fed into a faster pace of rate cuts.

Daily digest market movers: EUR/USD recovers into near-term highs, but ceiling noticeable

• EUR/USD recovered back into 1.0880 region, but 1.0900 looks difficult to snag.
• The euro area saw inflation decline less than markets hoped for, keeping rate cut expectations at bay.
• Pan-European Harmonized Index of Consumer Prices (HICP) inflation eased to 3.3% for the year ended in January, missing the median market forecast of 3.2% and trimming only slightly back from the previous period’s 3.4%.
• US January ISM Manufacturing Purchasing Managers’ Index (PMI) bounded into a new three-plus year high of 49.1 versus the forecast backtick to 47.0 from December’s 47.1.
• US Initial Jobless Claims ticked upwards to 224K for the week ended January 26 versus the forecast 212K, rising above the previous week’s 215K (revised from 214K).
• EUR/USD set to continue a rough pattern heading into Friday’s US NFP, forecast to print at 180K for January versus December’s 216K.
• NFP Preview: Forecasts from 10 major banks