Euro struggles near 1.1600 amid firm USD; looks to Eurozone HICP for some impetus

The EUR/USD currency pair finds itself struggling near the 1.1600 level on Tuesday, influenced by a robust US Dollar. During this Asian session, the pair is trading at around 1.1600, marking a slight decline of nearly 0.10% for the day. Traders are currently observing the preliminary Eurozone Harmonized Index of Consumer Prices (HICP) as a potential impetus to move the market.

Economists anticipate a rise in Eurozone inflation during August due to elevated energy prices, which could push the European Central Bank (ECB) into a rate increase in September. This expectation was further bolstered by German Consumer Price Index (CPI) data showing an increase in August to 2.9% YoY, up from 2.8% in the previous month.

Furthermore, ECB executive board member Isabel Schnabel has expressed support for another rate hike, suggesting that the market reaction to the report may be less pronounced. As traders focus on the US economic calendar, which includes the ISM Manufacturing PMI and JOLTS Job Openings data, any intraday move up in EUR/USD is likely to be absorbed and sold into.

However, a break below the 100-day Simple Moving Average (SMA) could trigger bears, potentially leading to a decline to the 23.6% Fibonacci retracement level at 1.1501. Should prices fall further, the structural floor at the Fibonacci cycle low near 1.1323 could be exposed. On the upside, the 38.2% Fibonacci retracement at 1.1611 acts as immediate resistance, and a daily close above this barrier would help ease downside pressure and open the path towards the 1.1700 and 1.1789 retracement barriers.