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For the EUR, it is a relatively busy session on the Eurozone economic calendar. Finalized inflation figures for Italy were out ahead of Eurozone trade data due out shortly.
The inflation numbers had a muted impact on the EUR, with the markets looking ahead to US retail sales figures later today.
From Italy, the annual rate of inflation picked up from 6.8% to 8%, which was in line with prelim figures. Political uncertainty accompanies the pickup in inflation following Prime Minister Draghi’s attempt to resign.
Eurozone trade data could test EUR support, with a widening of the trade deficit likely to raise more red flags over the Eurozone economic outlook. Weak numbers would also further question by how much the ECB can lift rates to begin reeling inflation back to target.
Economists have forecast a narrowing of the trade deficit from €32.4 billion to €31.7 billion.
EUR/USD Price Action
At the time of writing, the EUR was up 0.11% to $1.00250.
A mixed morning saw the EUR rise to an early high of $1.00411 before falling to a low of $1.00068.
The EUR/USD left the Major Support and Resistance Levels untested early on.
Technical Indicators
The EUR/USD will need to avoid the $1.0008 pivot to test the First Major Resistance Level (R1) at $1.0065 and resistance at $1.0100.
Market risk sentiment will need to improve to support a breakout from the Thursday high of $1.00588.
An extended rally would bring the Second Major Resistance Level (R2) at $1.0115 and resistance at $1.0150 into play.
The Third Major Resistance Level (R3) sits at $1.0222.
Failure to move through the pivot would leave the First Major Support Level (S1) at $0.9958 into play.
Another extended sell-off throughout the day would likely test the second Major Support Level (S2) at $0.9902 and support at $0.9900.
The Third Major Support Level sits at $0.9795.
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 $1.01303.
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 R2 and the 50-day EMA to target resistance at $1.0150.
The US Session
It is another big day ahead for the global financial markets. US retail sales will be the key driver of the day.
Upbeat retail sales figures would support the more hawkish Fed rate hike bets that would pressure the EUR/USD pair.
This article was originally posted on FX Empire