EUR/USD Down Again After U.S. CPI Report


eurusd midday pic oct 22

The Euro came under heavy selling pressure during today’s trading session, building on the losses it suffered last night. This was primarily was due to the European Central Bank indicating that it will in fact buy corporate bonds as part of its asset purchase program. Prior to this announcement the ECB already started buying covered bonds in order to infuse liquidity in the system. Furthermore, the Euro additionally experienced another rapid decline as reports emerged in Spain today that 11 European banks may fail the upcoming ECB stress test.

At 13:30 GMT traders witnessed the Dollar rise considerably, as positive CPI data (0.1%) was released. This should provide considerable insight as to whether or not the Federal Reserve will hike interest rates before expected time.

When looking at the hourly chart for the EUR/USD, the currency pair was unable to move above the resistance zone $1.28281 and subsequently slipped below trend line support near $1.27114, with the next level of support emerging at $1.25454. The momentum indicator for the EUR/USD has slid yet again into bearish territory and is currently showing no signs of a reversal.


Additionally, the relative strength index has given a clear sell signal, pointing towards an impending downtrend in the near term. It is important to note however, the EUR/USD slipped below its 100 day moving average, which currently stands at $1.27504)

Actionable Insight:

Short EUR/USD at current levels for an intermediate target at $1.25454, with a strict stop loss above $1.2711

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Deepak Tiwari, a law graduate, has been working as a journalist for six years now. He currently writes on Bitcoin, economic, and Forex related news at ForexMinute, the brand new financial news portal which is making waves among Forex traders around the globe for the innumerable Forex resources it offers for readers, traders and brokers. His other specialties include writing on law & governance, finance, internet marketing, careers, politics, international relations & diplomacy, etc.