- The bias remains bullish as long as it stays above the median line.
- A new higher high activates further growth.
- The US data should bring life to the EUR/USD pair.
The EUR/USD price has shown continued growth following the release of US inflation data, reaching the 1.0887 level. Presently, it has experienced a slight retreat and stands at 1.0848 as of the current moment.
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It’s worth noting that a temporary pullback is a common occurrence after a recent upward swing. The rebound of the Dollar Index contributed to the USD gaining ground against its counterparts. Despite this, the currency pair maintains a positive outlook in the short term, given the potential for the Dollar Index to reverse course at any moment.
Yesterday brought a mix of economic data from both the Eurozone and the US. Notably, the US retail sales figures and the Empire State Manufacturing Index provided support to the greenback.
Today’s US data is expected to play a crucial role in shaping market dynamics. Projections indicate that Unemployment Claims may rise to 221K from the previous 217K. The Philly Fed Manufacturing Index is anticipated at -10.4 points, and Industrial Production could see a 0.4% decline following a 0.3% growth in the prior reporting period. Additionally, the Capacity Utilization Rate is expected to be at 79.4% in October, a slight decrease from 79.7% in September.
It’s important to note that positive US economic data is likely to strengthen the USD, while weaker-than-expected figures could exert downward pressure on the greenback. The market remains responsive to these indicators, and prudent observation is warranted.
EUR/USD price technical analysis:
From a technical perspective, the EUR/USD pair experienced a retreat after falling short of reaching the upper median line (uml) of the ascending pitchfork. The inability to retest the 1.0887 higher high and a false breakout above 1.0865 signaled weakening momentum among buyers. Currently, the pair approaches the median line (ml) as a dynamic support. The overall bullish bias persists as long as the price remains above this level, and the potential for an upside continuation is activated with a new higher high.
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However, it’s essential to monitor the situation closely. If the pair drops and stabilizes below the median line, a more significant correction could be triggered. In such a scenario, downside targets may include the R2 level at 1.0800 and the lower median line (lml). This potential correction could materialize, particularly if the Dollar Index (DXY) rallies following the release of US data. As always, staying attentive to market developments will be key in navigating potential shifts in the currency pair’s dynamics.
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- Source: https://www.forexcrunch.com/eur-usd-price-corrects-after-cpi-led-gains-to-1-0880/
