In This Article:
For the EUR, it was a quiet session on the Eurozone economic calendar. Wholesale inflation figures for Germany were the key stats of the day.
The stats had a muted impact on the EUR, however, with the markets responding further to the US inflation figures and expectations of a more aggressive Fed move to tackle inflation.
In June, the German Wholesale Price Index (WPI) increased by 0.1% versus 1.0% in May. Year on year, the WPI was up 21.2%, which was softer than the 22.9% increase in May.
EUR/USD Price Action
At the time of writing, the EUR was down 0.44% to $1.00083.
A mixed morning saw the EUR rise to an early high of $1.00588 before falling to a low of $1.00065.
The EUR/USD left the Major Support and Resistance Levels untested early on.
Technical Indicators
The EUR/USD will need to move through the $1.0058 pivot to test the First Major Resistance Level (R1) at $1.0117 and resistance at $1.0150.
Market risk sentiment will need to improve to support a breakout from the Wednesday high of $1.01222.
An extended rally would bring the Second Major Resistance Level (R2) at $1.0182 and resistance at $1.0200 into play.
The Third Major Resistance Level (R3) sits at $1.0306.
Failure to move through the pivot would leave the First Major Support Level (S1) at $0.9993 into play.
Another extended sell-off throughout the day would likely test the second Major Support Level (S2) at $0.9933 and support at $0.9900.
The Third Major Support Level sits at $0.9809.
Looking at the EMAs and the 4-hourly candlestick chart (below), it is a bearish signal.
At the time of writing, the EUR sat below the 50-day EMA, currently at $1.01613.
The 50-day EMA slid back from the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA, EUR/USD price negative.
A breakout from R1 would support a run at the 50-day EMA and R2 to target the 100-day EMA, currently at $1.02801.
The US Session
Weekly jobless claims and wholesale inflation figures are due later today. The stats will draw interest following the pickup in consumer price inflation in June.
FX Empire Senior Editorial Team Member James Hyerczyk had this to say,
“Early today we’re seeing the true reaction to the US CPI report. The great debate over whether the Fed hikes 75 bp or 100 bp on July 27 has begun. It could last 10 days, or it could be over today with the release of the PPI report, or even Friday with the U.S. Retail Sales report on tap.”
James added,
“The key development on Wednesday: Atlanta Fed President Raphael Bostic added weight behind the speculation, saying the higher-than-expected inflation print puts a full-point increase on the table. He is a noted dove so when he flips to the hawkish side, in my opinion, it’s big news.”