The Euro (EUR) extended downside movement against the US Dollar (USD) on Wednesday, dragging the price of EUR/USD to less than 1.3170 as bears remain firmly in control. The bias is also bearish due to Lower Low in the ongoing correction wave.
As of this writing, the pair is being traded around 1.3163. A support may be seen near 1.3110, the horizontal support area ahead of 1.3100, the psychological level and then 1.3045, the 76.4% fib level as demonstrated in the following chart.
On the upside, the pair is expected to face a hurdle near 1.3227, the 61.8% fib level ahead of 1.3374, the 50% fib level and then 1.3486, the 55-Day Simple Moving Average (SMA). The bias will remain bearish in the long run as far as the 1.3432 resistance area is intact.
The Bundesagentur für Arbeit and German Statistics Office will release the Unemployment report on Thursday (tomorrow). According to the median projection of different economists, the unemployment level remained steady at 6.7% in August as compared to the same level in the month before. Generally speaking, higher unemployment rate is considered negative for the economy, thus a worse than expected actual outcome will be seen as bearish for the pair and vice versa.
Harmonized Index of Consumer Prices
The Statistical Office of the European Union will release the harmonized index of consumer prices for Germany on Thursday. According to the average forecast of various economists, the Consumer Prices Index –a key gauge for inflation—remained steady at 0.8% in August as compared to the same reading the same month of the year before. Generally speaking, higher consumer prices are considered positive for the developed economies, hence a better than expected actual reading will be seen as bullish for the pair and vice versa.
Considering the overall technical and fundamental outlook, buying the pair on the emergence of daily bullish pin bar or bullish engulfing candle appears to be a good strategy because the price has entered into oversold territory.