The EUR/USD has decreased a little today and could drop further if the US dollar index will have enough power to resume the short term rebound, the currency pair is still trading higher and has tried to retest the 1.1466 horizontal resistance, but the price is erasing yesterday’s gains, remains to see how the price will react after the US economic data will be released. The EUR/USD has rebounded in yesterday’s trading session even if we didn’t have any economic new to move the price, the greenback was weakened by the USDX’ drop, the index has retreated somehow expected after the impressive rally from the last week.

The Euro was punished today by poor economic data, the Euro-zone Industrial Production has decreased by 0.8% in March even if the traders have waited for a 0.1% increase, the production has decreased less compared to the 1.2% drop from February. The French Final CPI has increased by 0.1%, matching expectations, the growth has remained steady for the second month in April. The German WPI has come better than the 0.2% estimate, has increased by 0.3% in April, the same as in March.

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The EUR/USD remains firm after has failed to consolidate above the 1.1466 level, the price continues to trade higher, we could have a sideways movement on the short term till we’ll have clear direction. Personally I’ve expected a broader retreat as the price has failed to reach the sliding line, and most important has failed once again to reach the median line of the ascending pitchfork, remains to see what will happen tomorrow when the US is to release the retail sales data, any disappointment tomorrow could push the price much higher in the coming period.

The US dollar has taken a hit from the Unemployment Claims today, the initial claims have increased unexpectedly higher from 274K to 294K in the last week, the indicator has reached the highest level after July 2015, when the Jobless Claims were 297K. Moreover the Import Prices have increased only by 0.3% in April, less compared to the 0.6% forecast, the import prices have reached the same growth rate like in March.

The EUR/USD perspective remain bullish on the short term as the price has failed to stay below the 1.1376 level, the price has retreated a little in last days but the outlook remains bullish as long as the price is trading above the 1.1342 – 1.1367 support area.

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The price has found temporary support on the median line (ml) of the short descending pitchfork, has retested this dynamic support and could climb higher if the price will close above this level, if the pair will bounce again, then the next upside target will be at the 50% Fibonacci line (descending dotted line), we have a confluence at the intersection of the 50% line with the 1.1466 level, the next major important resistance will be at the upper median line of the descending pitchfork. The price could become strongly bearish on the short term only if the price will decrease below the median line (ml), the downside target will be at the lower median line (lml).

One thought on “EUR/USD hovers below major resistance May 12, 2016”

  1. Jim Reddihough says:

    Thanks

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