EUR/USD Forecast: Range tightening, directional breakout around the corner?

EUR/USD Current price: 1.1329
Stocks and government bond yields remain depressed, weighing on the USD.
The EU October Producer Price Index soared by 5.4% in the month.
EUR/USD trades in a tight range defined by Fibonacci levels.
The EUR/USD pair keeps trading within familiar levels above the 1.1300 figure, modestly up on Thursday. The market is in wait-and-see mode, as uncertainty arose following the announcement of a new COVID-19 variant and comments from US Federal Reserve chair Jerome Powell, who hinted at speeding up tapering amid persistently high inflation. Meanwhile, stocks trade with a sour tone, while US Treasury yields are under mild pressure, weighing on the greenback at the time being.

On the data front, the EU published the October Producer Price Index, which skyrocketed to 21.9% YoY, after rising by 5.4% in the month. The Union’s unemployment rate contracted to 7.3% in the same month, as expected. The US published Initial Jobless Claims for the week ended November 19, which contracted to 222K much better than anticipated, while the November Challenger Job Cuts printed at 14,875K in November.
EUR/USD short-term technical outlook
The EUR/USD pair is technically neutral, with the downside limited in the near term by a Fibonacci support level at 1.1305, the 23.6% retracement of the November slide. The 4-hour chart shows that the 20 SMA keeps advancing, now a handful of pips below a bearish 100 SMA, while the pair hovers in between. Meanwhile, technical indicators have lost directional strength but hold within positive levels. Bulls may have a chance if the pair overcomes the next Fibonacci resistance level at 1.1380.

Support levels: 1.1305 1.1260 1.1210

Resistance levels: 1.1380 1.1425 1.1470