- Removing the downtrend line activates a bigger rally.
- Canadian inflation data should have an impact tomorrow.
- The bias remains bearish as long as it remains below the downtrend line.
The EUR/USD price recovered in the short term as the US dollar entered a corrective phase. The pair is trading at 1.0771 at the time of writing.
The bias remains bearish despite the current uptick. The pair moved lower after rising amid profit-taking. On Friday, PPI rose 0.3%, beating expectations for a 0.1% rise, Core PPI reported a 0.5% rise, beating forecasts for a 0.1% rise, and Prelim UoM Consumer Sentiment came in at 79, 6 points compared to an estimated 80.0 points.
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Today, Canada’s IPPI came in line with expectations, while the RMPI rose 1.2%, up from an estimated 0.7% rise.
Tomorrow, Canadian inflation data should have a big impact on the dollar. CPI is expected to report an increase of 0.4%. On the other hand, the current account of the Eurozone could fall from 24.6 B to 20.3 B.
Moreover, the minutes of the FOMC meeting could change sentiment on Wednesday, while manufacturing and services data should move the price on Thursday.
Technical analysis of EUR/USD price: Downtrend intact
Technically, the EUR/USD price developed a new move higher after failing to retest the middle line (ml), and has now almost reached the downtrend line.
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As long as the pair is below it, the bias remains bearish. Testing or registering false breakouts can herald a new downward move. Also, failure to reach this dynamic resistance indicates exhausted buyers.
The weekly pivot point of 1.0758 stands as static support. Removing the downtrend line confirms more momentum higher. Psychological level 1.08 also represents a key roadblock.
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