Risk aversion dominated the Asian session, as Chinese inflation rose less than expected in September, whilst wholesales prices fell by 5.3%, maintaining its negative trend for almost four years. European equities opened once again lower, leading to an EUR advance. The pair reached a fresh high of 1.1427 before retreating some, but holds above the 1.1400 level, after the release of inflation readings for Spain, France and Italy, all down monthly basis.
Technically, the 4 hours chart shows that bulls maintain the lead, with the 20 SMA extending its advance below the current level, the RSI heading slightly higher in overbought levels, and the Momentum indicator posting a tepid bounce from its mid-line. As of lately, the technical stance is bullish, despite the lack of upward strength.
View the Live chart of the EUR/USD
Some short term buying interest is now aligned between 1.1380 and 1.1400, and as long as the level holds, the pair should extend its rally up to 1.1460. This last has capped the upside since May this year, dismissing the spike up to 1.1713 posted late August in the Black Monday that anyway was quickly reversed, which means strong selling interest may reject the price on a first attempt to break above it. However, if the retracement is shallow, chances are of a break higher, with stops getting triggered once above the level, and signaling a stronger advance afterwards up to 1.1520.
The pair needs to accelerate below 1.1350 on the other hand, to turn intraday bearish, pointing then for a test of the 1.1290/1.1310 price zone.
Latest updates on the EUR/USD Forecast
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