Technical Bias: Short-term Bullish
Key Takeaways
Euro is forming a nice bullish pattern suggesting that more gains are likely in the near term.
EURUSD is heading towards an important resistance area at 1.0900 where sellers might appear.
Today, the German Producer Price Index released by the Statistisches Bundesamt Deutschland is expected to gain by 0.2% in March 2015.
Recent upside in EURUSD could encourage buyers moving ahead, but there are many hurdles on the way up.
Technical Analysis
There was a bearish pattern formed on the daily chart of the EURUSD pair earlier, which was broken and paved the way for more losses. Later, the pair found support around the 1.0550-00 area and managed to recover the ground. The pair has already cleared the 50% fib retracement level of the last drop from the 1.1036 high to 1.0524 low. However, there is a monster resistance around the broken triangle which is now around the 76.4% fib retracement level. Moreover, the 50 simple moving average (SMA) – 4H is coinciding with the same area highlighting the importance of the resistance. Let us see if the pair reaches there how it reacts in the short term.
If the EURUSD pair moves lower from the current levels, then initial support is around the 1.0750-40 levels followed by 1.0700.
The daily RSI is heading towards the 50 level, which is pointing that the pair is heading towards a critical area.
German PPI
Later during the London session, the Producer Price Index will be released by the Statistisches Bundesamt Deutschland calculating the average changes in prices in the German primary markets. The forecast is of an increase of 0.2% in March 2015, compared to last 0.1%.
Trade Idea
Selling rallies in the EURUSD pair around the 50-day SMA looks good as long as it stays below 1.0900.
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