EURUSD – Euro’s Downside Thrust Before Higher Vs Dollar

EURUSD – Euro’s Downside Thrust Before Higher Vs Dollar

Key Highlights

  • The Euro recently popped higher against the US Dollar to trade above the 1.0940 resistance.
  • There was a contracting triangle pattern formed on the hourly chart of EURUSD, which was broken near 1.0920 for an upside move.
  • Today in the Euro Zone, the CPI reading for Oct 2016 (preliminary) will be released by the Eurostat, which is forecasted to remain stable.
  • In New Zealand today, the Building Permits released by the Statistics New Zealand posted an increase of 0.2% in Sep 2016.

EURUSD Technical Analysis

The Euro started this week with a bullish tone, and traded above the 1.0920 and 1.0940 resistances against the US Dollar. The EURUSD pair is currently correcting, but may find buyers on the downside.

EURUSD Technical Analysis

As mentioned, there was contracting triangle pattern formed on the hourly chart of EURUSD, which was cleared at 1.0920 to open the doors for more gains. There was an upside move towards 1.0992 where the pair faced sellers.

The pair has started a correction, and may trade towards the 38.2% Fib retracement level of the last wave from the 1.0882 low to 1.0992 high. In that situation, the chances of buyers taking a stand are very higher, and the pair may trade back higher.

Euro Zone Consumer Price Index

Today, there are a few important releases in the Euro Zone. The most significant one is the Consumer Price Index, which is a measure of price movements obtained by comparison of the retail prices by Eurostat.

The market is aligned for an increase of 0.5% in Oct 2016 (preliminary), compared with Oct 2015. If the outcome is better than the forecast, then it may help the Euro in the near term.

New Zealand Building Permits

In New Zealand today, the Building Permits, which shows the number of permits for new construction projects was released by the Statistics New Zealand. The market was not expecting any major increase in Sep 2016, compared with the previous month.

New Zealand Building Permits

However, the result was a bit higher, as there was a rise of 0.2% in building permits. The report added that “In the 12 months to August 2016, 29,627 new homes were consented, with a total estimated value of just over $10 billion. The number increased 14 percent from the August 2015 year, while the value increased 24 percent“.

The market is currently ant-dollar, which means the EURUSD and NZDUSD pair may climb higher in the short term.

Aayush Jindal

Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a decade as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin and Ethereum markets.

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