The Euro slipped against the USD so far this afternoon, forfeiting most of its gains from yesterday’s trading session, and can be currently seen taking marginal support at $1.24708. The Euro experienced a vicious sell-off, post poor Industrial Production numbers that were released by the Eurozone. In a report released by Eurostat, the Eurozone production rose by only 0.6%, which was significantly lower than the expected 1.1 percent.
Most analysts are almost convinced that these dismal economic reports imply that the Eurozone economies are on the verge of entering into a triple-dip recession. Most leading experts presume that the European Central Bank will introduce its own version of quantitative easing way earlier than expected.
Traders should now shift their focus to FOMC Member Narayana Kocherlakota’s upcoming speech at 18:00 GMT. If this presentation is indeed hawkish we could see a further jump in the USD. It is imperative to state that the dollar recouped almost all of its losses from yesterday’s trading session against all major currencies.
When looking at the hourly chart for the EUR/USD, the currency pair continues to find resistance at higher levels, with all rallies being sold into. Additionally, the momentum indicator for the EUR/USD is now showing its first sign of tapering, denoting a move towards the sell side. Lastly, the relative strength index is providing a sell signal and is forming a lower-high.
Short the EUR/USD at current levels for an intermediate target at $1.24450, with a stop loss above $1.24708
Long the EUR/USD if it moves above $1.24708, with an intermediate target at $1.25250