The Euro managed to break an 8-day losing streak in yesterday’s trading session against its US counterpart after the release of Consumer price index figures produced no surprises to the market causing a selloff in the greenback.
Data published by the US Bureau of Labor Statistics showed that the CPI figures from the US remained unchanged from last month at 5.4% on a yearly basis in July. The annual Core CPI, which excludes energy and food prices, that often distorts the figures, moved lower to 4.3% from 4.6% in the same period.
After the release of the strong Nonfarm payroll figures last week, many had backed better than expected CPI figures which probably caused the US dollar to move higher yesterday in anticipation of such an event.
When this didn’t pan out, the dollar retreated as it gives the US federal Reserve some breathing room with regards to reducing their stimulus plan established to boost the US economy.
Moving ahead today, EUR/USD traders will keep their eyes on the Eurozone Industrial Production figures for June which are expected to hit the market at -0.2% which is a marked improvement from the previous month of 1.0%. Later in the day we will see the release of the Producer Price Index from the US and no changes are expected from the previous months figure of 5.6%. The US Jobless Claims figures will also be in focus to see if the good news about the US jobs market can continue following on from last Fridays strong NFP numbers.
The EUR/USD pair came perilously close in yesterday’s trading session to hitting a 4-month low of $1.1703 but it on managed to drop to $1.1705 before the buyers stepped in to protect this critical support level.
The currency pair is currently trading at around $1.1743 and will need to make a break through the current resistance level of $1.1768 to sustain any meaningful rally.(source:Fibogroup)
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