EUR/USD trying to hang on to 1.23 ahead of German CPI

• The Euro is holding steady ahead of German CPI figures which threaten to tip the scales in the bears' favor.
• The EUR has struggled to find bids this week as the ECB turns dovish on sluggish macro numbers across the European continent.

The EUR/USD is middling through the Asia session, testing near 1.2330 ahead of the European markets.

The Euro saw a bearish turnaround in action on Thursday, after failing to capture new ground on Wednesday and falling back into the early week's ranges.

Fawad Razaqzada noted Thursday that, "[the Euro] was dealt a double whammy of soft Eurozone data and surprisingly dovish European Central Bank meeting minutes. The single currency slumped initially after the publication of more disappointing data this morning[Thursday]. This time it was industrial production, which contracted by 0.8% in February rather than increase 0.1% as expected. This is the latest Eurozone data which points to evidence that growth in the region may be slowing down, crucially at a time when the ECB is considering to taper QE."

Fawad continued, "but if the recent trend of soft data continues then the central bank may have to delay the normalisation process. The ECB was actually surprisingly dovish at its last policy meeting. According to the meeting minutes, released earlier today, the Governing Council seemed worried about the impact of the trade war, noting "widespread concern" about the potential impact of protectionism. Of the euro’s strength, the ECB said that it "may have a more negative impact on inflation”. And on inflation, the conclusion was that the evidence for a sustained rise in prices towards levels consistent with the Governing Council’s target was “still not sufficient.” In other words, the ECB appears more likely to maintain status quo longer than some had thought."

Euro hit by double whammy of bearish news

The Eurozone sees a smattering of data for Friday's session, with CPI figures from Germany and Spain at 06:00 GMT and 07:00 GMT respectively, but the key figure to watch will be the headline year-on-year German Harmonized CPI for March at 06:00. The main number is expected to print at 1.5 percent, in-line with the previous figure, and a miss is looking more likely than a beat, which could deliver further bearish action to the EUR/USD heading into the weekend.

EUR/USD Levels to watch

The Euro is fighting to stay afloat and inside the current consolidation zone on Daily candles, and as FXStreet's Chief Analyst Valeria Bednarik noted earlier, the pair is "stable around the 1.2320 level, having lost its bullish strength, but still unable to confirm additional short-term losses, as in the 4 hours chart, it settled around its 100 and 200 SMA, while technical indicators turned flat around their mid-lines, having declined straight from overbought readings. The pair is also below its 20 SMA, which leans the scale toward the downside, albeit a break below 1.2250 is required for bears to become bolder."

Support levels: 1.2290 1.2250 1.2215                                                                     

Resistance levels: 1.2335 1.2370 1.2410