EUR/USD Echoing Bullish Picture Ahead of US CPI Data

Europe’s shared currency eked out a marginal gain of +0.1% versus its US counterpart last week, marking a fourth straight week in positive territory for the major currency pair. This will be a watched market ahead of Wednesday’s US CPI print, with technicals suggesting a move higher in EUR/USD from short-term support.

Long-Term Picture

There is little change evident on the monthly scale; buyers and sellers continue to square off just north of support coming in at $1.0516. Overhead, the 50-month simple moving average (SMA) calls for attention at $1.1122, closely shadowed by a layer of resistance at $1.1233. Aside from the aforementioned structure, trend direction continues to lean in favour of bears, emphasising relatively clear lower lows and lower highs since 2008.

While a bearish vibe is realised on the longer-term chart, things are more optimistic on the daily timeframe. After recovering from a support area between $1.0726 and $1.0739, buyers appear to be at the wheel for now (early uptrend visible through higher highs/lows off the bottom formed at $1.0601). While Quasimodo resistance at $1.0802 (black arrow) could ‘throw a spanner in the works’ for further upside this week, any meaningful push higher may take aim as far north as daily resistance between $1.0883 and $1.0864.

Short-Term Picture

As far as the shorter-term picture goes, H1 resistance appears limited/weakened between the current price and the $1.08 big figure, which happens to coincide closely with daily resistance highlighted above at $1.0802.

US hours on Friday witnessed moderate selling, consequently directing the technical headlights towards H1 support at $1.0754. As a result, considering the room for daily price to run for at least $1.0802 resistance, H1 support from $1.0754 could be a location buyers make a show from this week, targeting at least $1.08.

DISCLAIMER:

The information contained in this material is intended for general advice only. It does not take into account your investment objectives, financial situation or particular needs. FP Markets has made every effort to ensure the accuracy of the information as at the date of publication. FP Markets does not give any warranty or representation as to the material. Examples included in this material are for illustrative purposes only. To the extent permitted by law, FP Markets and its employees shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided in or omitted from this material. Features of the FP Markets products including applicable fees and charges are outlined in the Product Disclosure Statements available from FP Markets website, www.fpmarkets.com and should be considered before deciding to deal in those products. Derivatives can be risky; losses can exceed your initial payment. FP Markets recommends that you seek independent advice. First Prudential Markets Pty Ltd trading as FP Markets ABN 16 112 600 281, Australian Financial Services License Number 286354.