Key Highlights
- The Euro climbed to 1.2092 this past week against the US Dollar before starting a correction.
- There is a crucial bullish trend line with support at 1.1960 forming on the 4-hours chart of EUR/USD.
- China’s Consumer Price Index increased 0.4% in August 2017 (MoM), more than the forecast of +0.3%.
- China’s Producer Price Index increased 6.3% in August 2017 (YoY), more than the forecast of +5.6%.
EURUSD Technical Analysis
The Euro is in a major uptrend and recently traded to a yearly high at 1.2092 against the US Dollar. Dips in EUR/USD are likely to find support near 1.1980 and 1.1960 in the near term.
After trading as high as 1.2092, the pair started a short-term correction. Looking at the 4-hours chart of EUR/USD, there is a crucial bullish trend line forming with support at 1.1960.
The pair has moved below the 23.6% Fib retracement level of the last wave from the 1.1823 low to 1.2092 high. However, there are many supports such as 1.1989, 1.1980 and 1.1960 waiting on the downside to stop further declines.
The most important support is around the 50% Fib retracement level of the last wave from the 1.1823 low to 1.2092 high at 1.1957. On the upside, the 1.2040 is an initial resistance, followed by 1.2100.
China’s Consumer Price Index
Recently, the Chinese Consumer Price Index for August 2017 was released by the National Bureau of Statistics of China. The market was looking for an increase of 0.3% in the CPI compared with the previous month.
However, the actual result was better than the forecast, as there was a rise of 0.4% in the CPI (MoM). Looking at the yearly change in the CPI, the market was poised for an increase of 1.6%, more than the last +1.4%.
Again, the result was positive, as the yearly change in the CPI was +1.8%. Similarly, the Producer Price Index was forecasted to increase by 5.6% in August 2017 compared with the same month a year ago. The actual was better, as there was a rise of 6.3% in the PPI, more than the last +5.5%.
The overall result was positive for the risk sentiment, and dips in EUR/USD towards 1.1980-60 remains supported.
