EURUSD – Euro Attempting a Comeback Vs US Dollar

Key Highlights

• The Euro after a decline towards 1.0840 against the US Dollar this past week found support and recovered.
• The EURUSD pair is currently trading near a broken support trend line at 1.0930 on the 4-hours chart.
• The US Consumer Price Index for April 2017 released by the US Bureau of Labor Statistics this past Friday posted a rise of 2.2%, which was less than the last 2.4%.
• Today, there are a couple of CPI releases in the Euro Zone, which may impact the Euro.

EURUSD Technical Analysis

The Euro after testing 1.0840 support against the US Dollar recovered well. Let’s see if EURUSD can break 1.0940 for sustained upside move in the near term.Looking at the 4-hours chart of EURUSD, the pair broke a major bullish trend line at 1.0910 during the downside move. The same trend line is currently acting as a resistance and preventing gains.At the moment, the pair is also struggling to break the 50% Fib retracement level of the last decline from the 1.1021 high to 1.0839 low. If the Euro buyers succeed in breaking the 1.0940 resistance, there is a chance of EURUSD trading towards 1.1000.On the downside, the 100 simple moving average (H4) at 1.0880 can be considered as a good support.

US Consumer Price Index

This past week on Friday, there was a major release in the US, as the Consumer Price Index for April 2017 was reported by the US Bureau of Labor Statistics.The market was aligned for the CPI to increase by roughly 2.3% in April 2017, compared with April 2016. The actual result was a bit lower, as the CPI posted a rise of 2.2%, which was also less than the last 2.4%.The US Consumer Price Index (CPI) Ex Food & Energy was expected to increase by 2% in April 2017, compared with April 2016. However, it came in at 1.9%. The report mentioned in the release:

The all items index rose 2.2 percent for the 12 months ending April. While a smaller increase than the 2.4 percent rise for the 12 months ending March, this is still a larger rise than the 1.7 percent average annual increase over the past 10 years. The index for all items less food and energy rose 1.9 percent over the last 12 months; this compares to a 1.8 percent average annual increase over the past decade. The energy index rose 9.3 percent over the last year, while the food index increased 0.5 percent.

The result was not as the market expected, which is currently helping EURUSD in gaining ground. If the current market sentiment remains intact, there are chances of it breaking 1.0930-40 for further gains.