EUR/USD: The Exchange is fluctuating between the 50% and 61.8%

As traders wait for the preliminary German inflation statistics to be released, the EUR/USD pair is fluctuating in a very small range near 1.0730. The State of the Union (SOTU) remarks made by US President Joe Biden regarding the ongoing dispute with China had no effect on market players' willingness to take risks.

Weighed down by US Treasury yields, the US Dollar Index (DXY) is exhibiting a sideways performance below 103.00. The 10-year US government bond yields have fallen below 3.65%.

The preliminary German Harmonized Index of Consumer Prices (HICP) for January in the Eurozone is predicted to increase from the previous release of 9.6% to 10.0%.

Following an erratic movement following remarks on interest rate guidance from Federal Reserve (Fed) head Jerome Powell, the EUR/USD pair has since gone sideways. The major currency pair is anticipated to experience a sharp decline in volatility in the near future, which will lead to wider ticks and high volume after an increase in the same.

The exchange rate is fluctuating between the 50% and 61.8% Fibonacci retracements.