• EUR/USD reaches new four-day high of 1.0625, bouncing from lows of 1.0547.
• German inflation eases from 4.3% to 3%, below forecasts, while GDP contracts less than expected.
• Upcoming economic releases from Eurozone and US to provide further direction for the pair.

EUR/USD rises sharply during the North American session, reaching a new four-day high of 1.0625 as the Greenback (USD) remains defensive amid an improvement in risk appetite. The pair bounced off from daily lows of 1.0547, hit in the European session.

Pair bounces off daily lows, bolstered by easing German inflation and soft US Dollar

Economic data revealed in Germany that inflation is easing, as the Harmonized Indices of Consumer Prices (HICP) dropped in October from 4.3% to 3%, below forecasts of 3.3%. the news is welcomed by the European Central Bank (ECB), which halted its tightening cycle last Thursday, keeping interest rates unchanged, and shifted data dependent, according to ECB’s President Christine Lagarde.

However, the Gross Domestic Product (GDP) in Germany for Q3 was -0.1% QoQ, above forecasts of -0.3%, while annually based stood at -0.3%, less than the -0.7% contraction.

Despite that, the EUR/USD has resumed its upward trajectory, above 1.0600, bolstered by a soft US Dollar (USD), as shown by the US Dollar Index down 0.35%, at 106.21.

Across the pond, the US economic docket featured the Dallas Fed Manufacturing Index, which plummeted more than the previous month's reading, coming at -19.2 in October, below -18.1 in September. Although the data was negative, the EUR/USD barely flicked, with traders bracing for Tuesday’s data.

The Eurozone (EU) calendar will feature France and Italy’s GDP, Germany's Retail Sales, and the EU inflation data. On the US front, the docket would feature the Employment Cost Index, the Chicago PMI and the Conference Board (CB) Consumer Confidence.

EUR/USD Price Analysis: Technical outlook

The EUR/USD downtrend remains intact, as the daily chart is forming a bearish flag, though the ongoing upward correction could witness the pair testing the 50-day moving average (DMA) at 1.0653, which, once broken, could open the door to challenge 1.0700. On the other hand, if sellers keep the exchange rates below the former, the pair could dip to 1.0600 before slumping towards 1.0550, the bottom of the bearish flag.