EUR/USD analysis: waiting for Draghi to resume its advance
|EUR/USD Current price: 1.0680
Majors were mostly consolidating this Wednesday, with the EUR/USD pair ending the day marginally lower, at 1.0680. The American dollar corrected higher as a sign of relief, but gains were mostly shallow, with the common currency quickly rebounding from an intraday slide towards the 1.0650 region. Restricting market's activity is the upcoming ECB's monetary policy meeting this Thursday, in which Mario Draghi & Co. are expected to maintain the status quo, but offer a more optimistic statement, given the uptick in the region's inflation, among other signs of economic growth during the second half of 2016.
In the data front, Germany and the EU released the final revisions of December CPI, which matched expectations and previous estimates, passing unnoticed when it comes to price action. In the US, the Consumer Price Index increased 0.3% in December on a seasonally adjusted basis, while over the 12 previous months, the index rose by 2.1%, also in line with market's forecast. Industrial production rebounded in December, climbing 0.8%, although November figure was downwardly revised to -0.7%, while the capacity of utilization rose to 75.5% in the same month.
Technically, the EUR/USD pair remains bullish, although the daily consolidation has made technical indicators lose upward momentum. Nevertheless and in the 4 hours chart, the price is above a bullish 20 SMA, whilst the 100 SMA advanced to meet the 200 SMA, both around 1.0550 now. A major Fibonacci resistance comes at 1.0710, as the level stands for the 38.2% retracement of the November/January slide, with renewed buying interest above it opening doors for an advance towards the 1.0800 region. An unexpectedly dovish Draghi can trigger a downward correction, although declines beyond 1.0565 are unlikely during the upcoming sessions.
Support levels: 1.0650 1.0610 1.0565
Resistance levels: 1.0710 1.0750 1.0800
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