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EUR/USD – 1.1280 Proving Crucial For Euro To Dollar

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Aayush Jindal

Key Highlights

  • The Euro failed once again to settle above the 1.1280-90 resistance area against the US Dollar.
  • The EUR/USD pair declined this past week, but managed to hold the 1.1130-20 support.
  • Today, the Euro Zone Construction Output for April 2017 will be released by the Eurostat, which is forecasted to decline by 0.1% (MoM).
  • This past Friday, May’s 2017 Euro Zone CPI released by the Eurostat posted an in line forecast increase of 1.4% (YoY).

EURUSD Technical Analysis

The Euro traded towards 1.1290 against the US Dollar recently, but failed to break it once again. However, the EURUSD pair remains supported on the downside above 1.1100.EURUSD Technical Analysis Euro US DollarThe recent low was near 1.1130 from where a recovery started. The pair is moving nicely and may once again make an attempt to surpass 1.1300.Having said that, it won’t be easy for buyers to overtake sellers above 1.1300. If they succeed, it could open the doors for further gains may be towards 1.1500.On the upside, an initial hurdle is near the 50% Fib retracement level of the last decline from the 1.1295 high to 1.1130 low. A break above it may push the pair towards 1.1280.On the downside, the most important support is at 1.1120, followed by the 200 simple moving average (4-hour) at 1.1110.

Euro Zone CPI

This past Friday, there was a major release in the Euro Zone, as May’s 2017 CPI figure was reported by the Eurostat. The market expectation was an increase of 1.4% (YoY), similar to the last 1.4%.Euro Zone CPI May 2017The actual result was in line with the forecast, as the Euro Zone CPI increased 1.4%. The monthly change was -0.1%, which was again in line with the forecast.The report mentioned that:
In May 2017, the lowest annual rates were registered in Ireland (0.0%), Romania (0.5%), Denmark and the Netherlands (both 0.7%). The highest annual rates were recorded in Estonia (3.5%), Lithuania (3.2%) and the United Kingdom (2.9%).
Overall, the EURUSD pair may recover in the near term, but the most important hurdle for more gains is still near 1.1280-90. As long as the pair is below 1.1300, we may see ranging moves in the near term.
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