EURUSD Price Analysis: Euro Rally Nearing Resistance
EURUSD – Prices, News and Technical Analysis
- EURUSD rally likely to be buffeted by headwinds.
- A break above resistance may open a further leg higher.
The latest IG Client Sentiment Indicator shows retail are 46% long EURUSD but recent positional changes indicate a mixed trading outlook.
EURUSD Nudges Higher on Inflation but Growth Slows
Recently released data show that inflation has picked-up marginally in the EU, while growth has slipped back for the second quarter in a row. EU headline inflation rose to 2.1%, from 2.0%, but the ECB’s favoured indicator, core inflation rose to 1.1% from 1.0%, still way below the ECB’s below but close to 2% level. Growth slowed in the block to 0.3% in Q2, down from 0.4%.
EURUSD had been moving gently higher ahead of the data releases and is currently consolidating as it nears the July high at 1.1791. Breaking above here may prove difficult, especially if Fed Chair Jerome Powell gives a bullish update on the US economy at tomorrow’s FOMC meeting, while US non-farm payrolls lie ahead on Friday. The US jobs market remains extremely strong and little is likely to have changed due to the overall strength of the US economy.
EURUSD currently trades around 1.17250 and above its 20- and 50-day moving average. The RSI indicator is neutral but pointing slightly higher and there are minor resistance levels before the July high is hit. Above here the June 14 high at 1.1852 is the next target. On the downside, the two moving averages between 1.1682 and 1.1692 provide minor support.
EURUSD Daily Price Chart (December 2017 – July 31, 2018)
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--- Written by Nick Cawley, Analyst
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.