The EUR/USD has increased sharply today and has kissed new highs, was almost to touch a very strong resistance level, could increase further because the USDX is trading in the red. The USDX has fallen much below the 100.00 psychological level and below the 99.84 static support, a further drop will force the dollar to drop further versus its rivals.
The Euro has increased on the mixed Euro-zone data, we had good numbers today, which have supported the upside momentum. The dollar has decreased sharply because was being driven lower by the fundamental factors.
The Unemployment Rate has fallen from 9.7% to 9.6% in December, even if the economists have expected an increase to 9.8%, the CPI Flash Estimate has increased by 1.8%, exceeding the 1.5% estimate, moreover the Prelim Flash GDP rose by 0.5% in the Q4, exceeding the 0.4% forecast. The Core CPI Flash Estimate has come in line with expectations, has remained steady at 0.9% for the second month in January. The French Consumer Spending has fallen by 0.8%, even if the traders have expected to see a 0.2% growth, however, we had good data from France as the French Prelim CPI has decreased by 0.2%, less than the -0.5% estimate, moreover the French Prelim GDP rose by 0.4%, matching expectations.
The German Unemployment Change was reported at -26K in December, much lower compared to the -0.5K estimate, the Spanish Flash CPI has increased by 0.3%, beating the 2.4% estimate, the Euro has increased sharply and has ignored the German Retail Sales report, the sales have dropped by 0.9%, even if the specialists have forecasted a 0.6% growth.
On the other hand, the USD has stayed lower as the United States economic data have disappointed, the CB Consumer Confidence has dropped from 113.3 to 111.8, the indicator has come below the 112.6 estimate, while the Chicago PMI has fallen sharply from 54.6 to 50.3 points, even if the specialists have predicted an increase to 55.1 points.

The pair has increased and is very close to hit the upper median line of the major descending pitchfork, has rallied after the failure to reach and retest the median line (ML) of the descending pitchfork, could increase further if the USDX will drop deeper in the coming days. The perspective remains bullish as long as the price is trading inside the minor ascending pitchfork's body. The price could try to reach even the sliding parallel line from above the descending pitchfork's body, you can notice that the sliding line represents a very strong resistance, remains to see what will happen and how the rate will react when will touch this level again. The sentiment remains unchanged as long as the price remains trapped below the sliding parallel line, the rate will drop again if will fail to take out this major resistance.

EURUSDh4

The price is trading right below the upper median line (UML) of the descending pitchfork, remains to see if will have enough energy to take out this resistance because a failure to touch this level will send the price tumbling, however we could have a minor decrease before the rate will approach the sliding line (descending dotted line).

One thought on “EUR/USD right below a crucial resistance January 31, 2017”

  1. jean janssen says:

    I like your charts, nice and clean. thanks for your post.

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