EURUSD Looking to Break Trend Line Resistance Ahead of Euro Zone Data

EURUSD Drops Despite Dismal US CPI

EURUSD traded lower in yesterday’s trading despite dismal CPI numbers from the US. The currency pair initially hit an intraday high at 1.1143 and slid to a bottom at 1.1103 following the December inflation figures from the US. While the headline figure came in better than expected at 0.2%, the core reading (which excludes volatile items) missed its 0.2% estimate at 0.1%. EURUSD was able to recover some of its losses and finish the day at1.1126. By the end of the New York session, it was down 6 pips from its opening price.

Euro Zone Data Due Today

Today, a few reports from the euro zone are due. The French final CPI is due at 7:45 am GMT and is eyed at 0.4%. Meanwhile, the industrial production report for the euro zone is eyed at 0.3% later at 10:00 am GMT. Finally, the trade balance report is seen to print at 22.3 billion EUR.

Positive euro zone data may help the euro rally, while negative numbers could weigh it down. Stay tuned to our website as we provide updates on EURUSD as reports come out.

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EURUSD Outlook

On the 4-hour chart, EURUSD looks like it’s testing resistance at the falling trend line (from connecting the highs of December 31 and January 6). A bullish candlestick closing above a falling trend line is typically considered as bullish. However, it’s worth noting that this price, around 1.1135, also aligns with the 100 SMA and could limit any upside movement on EURUSD. A bullish candlestick closing above resistance at 1.1145 is needed before the currency pair can make a run up to its January 6 highs at 1.1204. On the other hand, reversal candlesticks around resistance could mean that EURUSD may drop to support at the 200 SMA again.

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