FXOpen
The Euro (EUR) inched higher against the US Dollar (USD) on Monday, after plunging to 14-year low last week as Fed increased its interest rate and hinted at least 3 more raises in cash rate next year. The technical bias remains bearish because of a lower low and lower high in the recent wave.
Technical Analysis
As of this writing, the pair is being traded near 1.0459. A hurdle can be seen around 1.0515, the short term horizontal resistance area ahead of 1.0685, another key horizontal resistance level and then 1.0905, a huge resistance zone. The technical bias shall remain bearish as long as the 1.1300 resistance area is intact.
On the downside, the pair is likely to find a support near 1.0362, a short term support level ahead of 1.0300, the psychological number as demonstrated in the given above daily chart. A break and daily closing below the 1.0300 support shall incite renewed selling pressure, validating a move towards 1.0000 which is the parity level.
Eurozone CPI
The final Eurozone November CPI reading was in line with the flash reading as the annual rate increased to 0.6% from 0.5% in October despite a 0.1% monthly decline in prices. The headline rate increased from 0.1% in November 2015 and was the highest reading since April 2014. The core rate was unchanged from October at 0.8% and declined slightly from the 0.9% rate seen in November 2015. Energy prices fell 0.2% on the month with an annual decline of 1.1% and compared with a 7.3% decline in the year to November.
Trade Idea
Considering the overall technical and fundamental outlook, selling the pair on rallies appears to be a good strategy in short to medium term.
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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
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