EUR/USD Forecast – Euro Nosedives Vs US Dollar Post ECB
- – The Euro declined sharply and moved below the 1.1750 support against the US Dollar after the ECB interest rate decision.
- – There was a break below a key bullish trend line with support at 1.1770 on the hourly chart of EUR/USD.
- – Recently in the Euro Zone, the German Import price index for Sep 2017 was released by Deutsche Bundesbank.
- – The outcome was above the forecast of 0.4%, as there was a rise in the index by 0.9% (MoM).
German Import Price Index
Recently in the Euro Zone, the German Import price index for Sep 2017 was released by Deutsche Bundesbank. The market was positioned for a rise in the price index by 0.4% compared with the previous month.
The actual result was in line with the forecast of +0.4%, as there was a rise in the index by 0.9%. Looking at the yearly change, the market was looking for an increase of 2.6% in the import price index in Sep 2017, and the actual was once again better as there was a rise of 3.0%. It was also higher compared with the last +2.1%.
The result was positive and might push the EUR/USD pair higher in the short term, but upsides are likely to be capped by the 1.1700 handle.
EUR/USD Technical Analysis
The Euro after trading towards the 1.1830 level found sellers and a bearish trend line against the US Dollar. The EUR/USD pair started a downside move and traded below the 1.1800 support area. The downside move gained traction after the ECB interest rate decision, and the pair tumbled below 1.1750.
The pair even broke a key bullish trend line with support at 1.1770 on the hourly chart. It traded as low as 1.1624 and is current consolidating losses. On the upside, an initial hurdle is around the 23.6% Fib retracement level of the last decline from the 1.1836 high to 1.1624 low.
However, the most important resistance is close to the 1.1700 handle and the 38.2% Fib retracement level of the last decline from the 1.1836 high to 1.1624 low.
Therefore, any major rallies in the short term towards 1.1700 can be considered as selling opportunity.
