EURUSD adds 0.11% at 1.0982 after the Germany Industrial Production s.a. (month over month) came in at 0.3% beating forecasts of -0.3% in August, but the yearly figure was a big disappointment as it came in at -4% a big miss from the forecasts of -2.7%. The France Trade Balance EUR came in at €-5.02B below forecasts (€-4.48B) in August. A set of dismal macro figures from EU weigh on the common currency while U.S. economy looks strong and Fed approach looks less dovish. The ECB, in its last policy meeting, cut the Deposit Rates by 10 bp to -0.50% and unveiled another round of debt purchases.
EURUSD price added four pips on the news; on the technical side EURUSD made an impressive rebound from two-year lows at 1.0878 up to 1.10 as the bearish momentum is intact with the pair trading below all major moving averages. The common currency has trapped in the descending channel since June. On the upside, immediate resistance stands at 1.0984 today’s high, a break above can lead prices up to 1.10 yesterday’s high while more supply will be met at the upper bound of the descending channel, at 1.1012. Short positions can sit comfortably as long as the pair trades inside the descending channel.
On the downside important support now stands at 1.0964 daily low, a break below will encourage more bears to join the action and drive the price action down to 1.0903 the low from October 2nd. Next strong support stands at two-year lows at 1.0878. This is the next target that could be attained on a convincing downside break of the 1.0903 critical support line.Download our latest quarterly market outlookfor our longer-term trade ideas.
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