EUR/USD Forecast – Euro Following Descending Channel Vs US Dollar

EUR/USD Forecast – Euro Following Descending Channel Vs US Dollar

  • – The Euro after trading close to the 1.1500 level against the US Dollar found sellers and moved down.
  • – The EUR/USD pair is currently following a descending channel pattern with resistance at 1.1425 on the hourly chart.
  • – Today in the Euro Zone, the Italian Consumer Price Index for June 2017 was released by the Italian National Institute of Statistics.
  • – The outcome was in line with the forecast, as there was a decline of 0.1% in the CPI (MoM).

 

Italy’s Consumer Price Index

Recently in the Euro Zone, the Italian Consumer Price Index for June 2017 was released by the Italian National Institute of Statistics. The market was positioned for a decline of 0.1% in the CPI compared with the previous month.

 

The actual result was in line with the forecast, as there was a decline of 0.1% in the CPI. In terms of the yearly change, there was a rise of 1.2%, which was again in line with the market forecast. The report added that:

In June, the lower growth of the annual rate of change of All items index was mainly due to the prices of Unprocessed food (+1.4%, from +3.8% in May) and Non-regulated energy products (+2.9%, from +6.8% in the previous month), partly offset by the increase of the prices of Services related to transport (+4.1% from +3.2% in May).

 

Overall, the EUR/USD pair may continue to move down as long as it is below the 1.1425-40 resistance zone.

 

EUR/USD Technical Analysis

The Euro this week broke the 1.1425 resistance to challenge the 1.1500 level against the US Dollar. However, it traded as high as 1.1489, and later started correcting lower. The EUR/USD broke the 1.1460 and 1.1440 support levels during the downside move.

 

EUR/USD Technical Analysis Euro US Dollar

 

The pair even traded below the 1.1425 support and the 100 hourly simple moving average. A low was formed at 1.1371 from where it recovered. However, there is a descending channel pattern with resistance at 1.1425 forming on the hourly chart.

 

It is protecting gains on the upside along with the 61.8% Fib retracement level of the last decline from the 1.1455 high to 1.1371 low. The 100 hourly simple moving average is also at 1.1420.

 

Overall, it would be very tough for buyers to break 1.1425-40 in the short term and there are chances of more declines towards 1.1380.

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