- A new lower low triggers more dips.
- The midline (ml) is viewed as a potential target.
- Tomorrow US data should bring big action.
EUR/USD is trading in the red at 1.0922 at the time of writing. The pair is facing resistance as the price corrects lower amid profit taking. The US dollar turned upside.
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Fundamentals brought some volatility yesterday. US CPI m/m rose 0.4% last month, in line with expectations. CPI rose 3.2% year-on-year, beating estimates of 3.1% growth, while Core CPI posted a 0.4% rise, beating expectations of 0.3% growth.
Higher inflation could force the Federal Reserve to maintain monetary policy. Today, Eurozone industrial production reported a 3.2% decline versus the 1.8% decline expected after a 1.6% rise in the previous reporting period, while Italy’s Q4 unemployment rate stood at 7.4%, above the expected 7.3%, but below the 7.6% in Q3.
Fundamentals should be decisive tomorrow as the US releases PPI, Core PPI, Retail Sales, Core Retail Sales and Jobless Claims. Positive economic figures should boost the dollar.
Technical analysis of EUR/USD price: Correction
As you can see on the hourly chart, the EUR/USD pair only registered a false breakout through the warning line (vl1), confirming buyer exhaustion.
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It has now turned to the downside and slipped below the upper middle line (uml), representing dynamic support. Cena tested this line again, and now he looks under pressure again.
However, only a drop and stabilization below the 1.0916 pivot point and the creation of a new lower low triggers more declines. If the pair falls deeper, the middle line of the ascending forks (ml) is seen as a potential target.
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