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EUR/USD Rebounds on German CPI Data

EUR/USD Rebounds on German CPI Data

Walker England, Forex Trading Instructor

Talking Points

The EUR/USD is now trading to new daily highs, as German CPI figures were released better than expected this morning. Expectations were set for today’s event at 0.6%, with figures released at an actual 0.7% (YoY) (Sep). Technically, the pair is moving on intraday resistance at 1.1250. A move through this value may open up the pair to test a declining trendline, which suggests daily resistance resides near 1.1278. Traders should continue to monitor these values going into tomorrow’s Euro Zone CPI release. Expectations are set at 0.4% (YoY) (Sep), and as a high importance event this release does have the ability to create volatility in the EUR/USD.

EUR/USD, Daily Chart & Resistance

(Created with TradingView)

In the 5 minute graph below, the EUR/USD can be seen rebounding from its daily low at 1.1196. The Grid Sight Index (GSI) has deciphered this move as a short term uptrend, with the EUR/USD putting in a series of higher highs in the last 3 hours of trading. After reviewing 49,600,648 pricing points, GSI has also indicated that price action has declined by 20 pips or more in 59% of the reported 29 matching historical events. This places the first historical bearish price distribution at 1.1219. A move through this value would suggest that this morning’s rebound may be seen as a retracement, as the EUR/USD turns back in the direction of its previous trend.

Alternatively, GSI has indicated that prices have advanced by 19 pips or more in 34% of the 29 historical matches. This places the first bullish historical distribution for the EUR/USD at 1.1259. A move through this value would open the EUR/USD to breakout higher towards longer term points of resistance. This includes the previously mentioned descending trendline at 1.1278 followed by the September 15th swing high near 1.1283.

Want to learn more about GSI? Get started learning about the Index HERE.

---Written by Walker England, Market Analyst

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.