EUR/USD analysis: dollar corrects lower, but bearish trend intact
|EUR/USD Current price: 1.0587
Following a quiet Asian session, the USD appreciated after London's opening, further accelerating its advance ahead of Wall Street opening, amid strong US data supportive of a March rate hike. The EUR/USD pair bottomed for the day at 1.0521, its lowest level since January 11th, but the greenback changed course during the US afternoon, suddenly entering negative territory daily basis against all of its major rivals. Dollar's reversal came in spite of another strong tax headline from US President Trump, who said that a massive tax plan will see the light in the "not-too-distant future," when speaking with retail executives. The pair set a daily high of 1.0608, but settled a few pips below 1.0590.
In the US, January Retail Sales rose by 0.4% when compared to the previous month, while the core reading, ex-autos, advanced 0.8%. Inflation in the same month surged by the most in four years, up by 0.6%, doubling expectations of 0.3%. The annual inflation rate printed 2.5%, above the 2.4% expected and previous 2.1%. Additionally, the New York Empire State Manufacturing index for February surged to 18.7, a strong bounce from previous 6.5, and the highest reading in over two years.
The late recovery was not enough to revert the negative tone of the pair, as in the 4 hours chart, the recovery stalled right around a still bearish 20 SMA. Furthermore and in the same chart, technical indicators have posted moderate bounces from their mid-lines, but remain well into negative territory. The pair has briefly broke below the 1.0565 Fibonacci support before recovering above it, but renewed selling interest below the level will likely result in fresh weekly lows, particularly if hopes about the upcoming US tax reform keep fueling sentiment. Additional gains beyond 1.0625, the immediate resistance, could result in a recovery up to the 1.0660 region, en route to the critical 1.0705 price zone.
Support levels: 1.0565 1.0520 1.0470
Resistance levels: 1.0625 1.0660 1.0705
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.