The EUR/USD pair is trying to take advantage of the previous day’s modest rebound from the 1.1780-1.1775 area, above the weekly low, and is oscillating in a narrow band during Wednesday’s Asian session. Spot prices are currently hovering around the 1.1815 zone, almost unchanged on the day, as investors eagerly await the release of preliminary euro zone consumer inflation data.

Preliminary estimates are expected to show that the Harmonized Index of Consumer Prices (HICP) fell to 1.7% y/y in January from 1.9% in the previous month, while the core index remains stable at 2.3% y/y. The European Central Bank (ECB) sees this as a transient deviation, suggesting no immediate adjustments to monetary policy. Nevertheless, the data may influence the common currency and give impetus to the EUR/USD pair.

Later in the North American session, investors will take cues from the US ADP Private Sector Employment Report and the US ISM Services PMI, which could further facilitate create near-term opportunities. However, the immediate market reaction to these releases will be rather narrow as attention will be focused on the much-anticipated ECB policy meeting on Thursday. The outcome will play a key role in shaping the EUR/USD pair in the near future.

Meanwhile, a slight deterioration in global risk sentiment provides some support for the safe-haven US dollar (USD) and has a negative impact on the currency pair. That said, the growing acceptance that the US Federal Reserve (Fed) will cut interest rates twice more in 2026 could constrain the USD and support the EUR/USD pair. This calls for caution before taking a position to extend the EUR/USD pullback from its highest level since June 2021, which was reached last week.