Talking Points:

  • EUR/USD Trades Lower on German CPI Data
  • Yearly Lows Reside at 1.0340
  • Looking for additional trade ideas for the Euro and US Dollar? Read our 2017 forecast

The EUR/USD has opened Monday’s trading lower, after German CPI figures were released under expectations. EUR German CPI (YoY) (JAN P) was expected at 2.0%, but released at 1.9%. This news is just the first of many set to impact the EUR/USD this week. Tomorrow, traders will be looking at German Unemployment Change (JAN) figures set at -5k.

Technically the EUR/USD is trending lower in the short term, with the pair breaking out below its 10 day EMA (Exponential Moving Average). This line is found at 1.0681, and as a value of former support may now be considered a point of resistance. Traders should note that the EUR/USD is still in a longer term downtrend, with the pair trading under its 200 day MVA (simple moving average) since October of last year. If the pair resumes this longer term downtrend, the EUR/USD may next target new 2017 lows under 1.0340.

EUR/USD Daily Chart & Averages

EUR/USD Trades Lower on German CPI Data

(Created Using IG Charts)

Intraday, the EUR/USD is beginning to find support above 1.0620. If prices begin to trend higher, traders may look for the pair to test the 10 period EMA on the 30 minute graph below found at 1.0659. A move above this point may suggest a turn in the short term trend, and open the pair to trade back towards 200 period MVA on the 30 minute graph at 1..0715.

In the event that prices turn lower, next support is found near the daily low at 1.0620. This is followed by the January 19th low at 1.0588. A breakout beyond this point should be considered extremely bearish in the short term, opening the EUR/USD to test the previously mentioned 2017 lows.

EUR/USD 30 Minute Chart & Averages

EUR/USD Trades Lower on German CPI Data

(Created Using IG Charts)

Lastly, sentiment figures for the EUR/USD read at -1.09. With 52% of positioning short, and 48% long, this may be considered a relatively neutral reading. If the EUR/USD continues to decline, it would be expected to see SSI figures flip towards a positive reading later in the week. Alternatively if the EUR/USD begins to trend higher, SSI would be expected to move back towards new negative extremes.

EUR/USD Trades Lower on German CPI Data

--- Written by Walker, Analyst for DailyFX.com

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