EUR/USD analysis: downside seem limited despite Draghi

Valeria Bednarik FXStreet

EUR/USD Current price: 1.2375

Draghi & Co. tried to cold down EUR's strength.
US Retail Sales missed expectations, down for a second consecutive month.

The EUR/USD pair edged lower for the first time this week, after reaching the 1.2410 region at the beginning of the day. The common currency lost some ground early Europe, following a Draghi speech, in which he repeated that, despite continued growth, inflation remains subdued, and therefore the bond-buying program will remain in place, as rates will likely remain low for a long time. Vitor Constancio and Benoit Coeure also spoke in different events, backed his stance. There were multiple macroeconomic headlines coming from both economies, but none of them enough to actually trigger some action. German inflation came in as expected in February, at 1.2% YoY, while the EU Industrial Production unexpectedly fell in January by more-than-expected, down 1.0% monthly basis, and up by 2.7% YoY. In the US, Retail sales fell for a second consecutive month, down 0.1% in February after a 0.3% decline in January, hurting equities sharper than the USD. This Thursday, Europe has little to offer in the macroeconomic front, although the US will release some minor employment data and manufacturing indexes.

The EUR/USD pair settled a handful of pips below the 23.6% retracement of its past two weeks' rally around 1.2375, , but retains a positive stance in the short term, as in the 4 hours chart, it is developing above all of its moving averages, while technical indicators bounced from their mid-lines, with the Momentum nearing its daily high. Renewed buying interest beyond 1.2410 should favor a new leg higher during the upcoming sessions, while the downward potential will remain limited as long as the pair holds above 1.2300.

Support levels: 1.2345 1.2300 1.2265

Resistance levels: 1.2410 1.2445 1.2480

View Live Chart for the EUR/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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