EUR/USD Forecast – Euro Faces Uphill Task Vs US Dollar

EUR/USD Forecast – Euro Faces Uphill Task Vs US Dollar

  • – The Euro declined sharply from the 1.1295 swing high against the US Dollar to trade towards 1.1130-20.
  • – The EUR/USD pair broke a monster bullish trend line at 1.1210 on the hourly chart to set a downtrend.
  • – Today in the Euro Zone, the CPI for May 2017 released by the Eurostat posted a decline of 0.1% (MoM).

 

Euro Zone CPI

Recently in the Euro Zone, the CPI for May 2017 was released by the Eurostat. The market was positioned for a decline of 0.1% in the CPI compared with the previous month.

 

However, the actual result was in line with the forecast, as the Euro Zone CPI declined by 0.1% (MoM). Looking at the yearly change, the forecast was an increase of 1.4%, and the result was the same. On the other hand, the Core CPI posted an increase of 1% (YoY), which was better than the forecast of 0.9%. In terms of the monthly change, there was no decline in the Core CPI in May 2017.

 

The EUR/USD pair may gain bids in the near term, but the 1.1195 and 1.1200 levels remain a major hurdle for buyers.

 

EUR/USD Technical Analysis

The Euro declined sharply after the fed interest rate decision, and moved lower by 100 pips from 1.1295 against the US Dollar. The EUR/USD pair traded below a key support area at 1.1210 and traded as low as 1.1131.

 

EUR/USD Technical Analysis Euro US Dollar

 

During the downside move, the pair broke a monster bullish trend line at 1.1210 on the hourly chart and the 100 simple moving average. After trading as low as 1.1131, the pair started a recovery and moved above the 23.6% Fib retracement level of the last decline from the 1.1295 high to 1.1131 low.

 

However, the pair is facing a major challenge near 1.1195 and 1.1200. The stated levels provided support earlier, and may now prevent an upside beak above 1.1210. The 38.2% Fib retracement level of the last decline from the 1.1295 high to 1.1131 low is also at 1.1193 to act as a resistance. Overall, selling rallies near 1.1200 can be opted with a tight stop in the near term.

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