German CPI preview: What to expect of EUR/USD?

German consumer inflation data will be released during the European session Monday. Analysts expect  an increase of 0.1% in annual basis for the German CPI in May but a decrease of 0.1% for the HICP (the CPI harmonized according to European Union standards).

A higher than expected reading should be positive for the euro, with higher energy prices supporting an upward surprise. However, data is expected to have a limited impact on EUR/USD with ECB meeting and US non-farm payrolls data dominating this week.

A lower-than-expected reading could weigh on the euro, but again the downside could be limited as the ECB is very unlikely to take new easing measures at this point.

EUR/USD levels to watch

Ahead of the release, EUR/USD was trading at 1.1140, recording a 0.19% gain on Monday. As for technical levels, next resistances could be found at 1.1171 (100-day SMA), 1.1200 (May 27 high/psychological level) and 1.1242 (May 23 high). On the flip side, supports are seen at  1.1097 (May 30 low),  1.1057 (Mar 16 low) and 1.1024 (Mar 7 low).