The Euro (EUR) extended downside movement against the US Dollar (USD) on Friday, for the fourth day in a row, dragging the price of EURUSD to less than even 1.0950 ahead of the Eurozone inflation report which is scheduled for release today. The technical bias remains bearish due to a Lower Low and Lower High in the recent wave on daily chart.
Technical Analysis
As of this writing, the pair is being traded around 1.0946. A support may be noted near 1.0877, the 61.8% fib level ahead of 1.0817, the channel support as demonstrated in the following daily chart. A break and daily closing below the channel support could incite renewed selling pressure, validating a dip towards the 1.0000, the parity level.
On the upside, the pair is expected to face a hurdle near 1.0990, the 50% fib level ahead of 1.1074, the channel resistance and then 1.1100, the confluence of psychological number as well as 38.2% fib level. The technical bias will remain bearish as long as the 1.1128 resistance area is intact.
Eurozone Inflation
The EuroStat is due to release the Eurozone Consumer Price Index (CPI) report for July today. It is considered a main gauge for inflation. According to the median projection of different economists, the CPI remained 0.2% in July as compared to the same inflation in the same month of the year before. Generally speaking, higher inflation figure is considered positive for the economy thus a worse than expected actual outcome will be seen as bearish for EURUSD and vice versa.
Trade Idea
Considering the overall technical and fundamental outlook, buying the pair around channel support could be a good strategy if we get a bullish pin bar or bullish engulfing candle near that level.
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