The weekly trendline set up from July 2012 low, at 1.2042, is being challenged today again as the EUR/USD tumbles below Friday’s lows of 1.3491. This drop ahead of the US Consumer Price Index is being driven by Dollar strength and reached as low as 1.3478 for now. That’s one pip higher than 2014 low obtained in February.
Downside pressure was confirmed once the EUR/USD failed to climb the 50 and 200-day moving averages, following a bearish crossover. On the downside, the pair still has the 200-week MA, at 1.3424, to protect it from further losses. However, a close below the trendline would be a second confirmation of a bearish market.
The US Consumer Price Index is expected to come in at 2.1% in June (YoY), just like the figure in May. The month-on-month data may ease from 0.4% to 0.3%. Housing data and the Richmond Fed Manufacturing are also on the way.
Dollar strength has been the order of the day recently as Fed’s Janet Yellen is looking to hike rates in the US, and may also be benefitting from some risk-off scenario on account of US-Russian tensions regarding the Ukraine conflict.
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