EUR/USD analysis: bulls are back

EUR/USD Current price: 1.1820

After a soft start to the week, the EUR/USD pair ended it up at 1.1820, a fifth consecutive weekly gain as soft US inflation coupled with arising political jitters. On Friday, official data showed that US CPI rose a seasonally adjusted 0.1% in July, and by 1.7% when compared to July 2016, missing market's expectations. The core figures, those excluding volatile food and energy prices, were also below market's forecasts, denting the case for a hawkish Fed next September, and even putting into question a move in December. Earlier on the week, risk aversion dominated markets, with North Korea and the US menacing the other with a nuclear attack, limiting gains for the high yielding common currency, but also harming the greenback.

The dollar has little hopes of changing course during the upcoming week, and in fact, for the next month, until the ECB and Fed's monetary policy meetings next September. From a technical point of view, the downward potential is well-limited, given that in the daily chart, the price held above a bullish 20 SMA, despite a couple of attempts to break lower, while the Momentum indicator hovers within positive territory with a downward slope,  but the RSI is already regaining the upside, currently at 65, somehow indicating further gains ahead. Shorter term, and according to the 4 hours chart, the upside is  favored as the price settled above its 20 and 100 SMAs, while technical indicators hold within positive territory, easing the upward strength due to limited volumes at the end of the week, but far from suggesting a downward move ahead.

Support levels: 1.1780 1.1735 1.1690

Resistance levels: 1.1860 1.1910 1.1945

View Live Chart for the EUR/USD

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