The EUR/USD currency pair has been trading in a narrow range since the opening of today's trading day amid the absence of important macro statistics in today's economic calendar. As of writing, the intraday volatility of EUR/USD is 34 points.

The intraday volatility of the EUR/USD pair fluctuates in different periods of the year. On average, it ranges from 50 to 120 points, but can exceed 300 points during periods of publication of important political or economic news. And 34 points of today's intraday volatility is nothing at all in the dynamics of the pair. Obviously, the market needs new drivers, and market participants who follow the quotes of this currency pair need new information regarding the current economic situation in the eurozone and the USA.

Tomorrow (at 10:00 GMT), Eurostat will publish a report with updated data on eurozone GDP for the 4th quarter, and (at 13:30), the U.S. Bureau of Labor Statistics will release its inflation report for January. Without a doubt, the publication of this report will set the market in motion, and the dollar will receive a new powerful impetus to either resume the decline, or for a more confident growth. Most likely, events on the market will develop according to the first scenario: economists expect consumer prices to continue to decline in January. According to the forecast, U.S. annual CPI may fall to 6.2% from 6.5% in December. Annual core CPI may also decline to 5.5% in January from 5.7% a month earlier.

This is negative information for the dollar. If it turns out to be even weaker, the dollar will decline sharply. Whether it will be short-term is still hard to say. Much will also depend on other factors, economic and geopolitical, while the dollar gets support from the tense geopolitical situation in the world. Also, economists and market participants are assessing the report released last Friday by the University of Michigan: the preliminary index of consumer confidence in Americans rose in February to 66.4 from 64.9 a month earlier, and the report component in the inflation expectations for the year rose to 4.2% from 3.9% in January.

In addition, market participants remember the recent statements by the Fed leaders about the premature easing of the fight against high inflation in the U.S. According to their statements after the Fed meeting ended on February 1, "further rate hikes will be required."

The monthly report of the U.S. Department of Labor with the data for January, published early this month, also contributed to the strengthening of the dollar and growth of its index in February. According to the report, the U.S. nonfarm payrolls added 517,000 in January, while the overall unemployment rate fell to 3.4% from 3.5% a month earlier. The report data was much stronger than forecast (+185,000, following December's +260,000 increase). Meanwhile, the average hourly earnings of Americans continued to rise in January.

Immediately after the publication of this report, the dollar strengthened sharply, and its DXY index closed this trading day at 102.75, 2% above the local 10-month low of 100.68, reached the day before the publication.

As for the dynamics of the euro, investors are concerned about Europe's high inflation, which in some countries, such as Germany, is again showing an upward trend. In addition, the euro is under pressure from the threat of a recession in the economy, which reduces the room for maneuver for the ECB and for the possibility of a more aggressive monetary policy by the bank.

As we noted above, tomorrow, Eurostat will publish a report with updated data on eurozone GDP for the 4th quarter. The preliminary estimate for the Q4 was: +0.1% (+1.9% in annual terms) with the forecast of +0.2% (+2.2% in annual terms). If the updated data turns out to be worse than the first estimate, then the euro and the EUR/USD pair may be under short-term pressure.

Currently, EUR/USD is trading in a very tight range near 1.0680, having managed to break a 4-week low at 1.0656 during the Asian trading session.

Until the end of January, EUR/USD continued to develop an upward medium-term correction while remaining within the long-term bearish trend, below the key long-term resistance levels 1.1000, 1.1120.

At the same time the pair found support at the important level of 1.0670. However its breakdown might provoke further decline towards the key support levels 1.0570 and 1.0495. Their breakdown will finally return EUR/USD to the long-term bear market zone.