EUR/USD analysis: Draghi down-talks the EU, US CPI eyed
EUR/USD Current price: 1.1847
The EUR/USD pair came under selling pressure on Thursday, on a mix of US positive data and a change in ECB head's Draghi rhetoric. The greenback started the day with a soft tone, amid insipid Fed's meeting Minutes released late Wednesday, but started grinding higher after the European opening, gaining modest traction on better-than-expected US data. US producer prices rose in September, up by 0.4% in the month, matching market's expectations, and by 2.6% when compared to September 2016, beating expectations of 2.5%. The core readings also beat market's forecasts. Weekly unemployment claims were of 234K for the week ended October 6th, better than the 251K expected, while previous week's number was downwardly revised to 258K. As for the common currency, comments from ECB's head Draghi who speaking in Washington DC said that policymakers expect rates to remain at their present levels for "an extended period of time, and well past the horizon of our net asset purchases."
A relevant news that passed unnoticed by USD traders was the fact that US President, Donald Trump signed an executive order directing federal agencies to consider expanding health-insurance coverage in low-cost plans that are not subject to Affordable Care Act rules, as he hasn't been unable to pass the Obamacare reject-bill through the Congress. While this executive order is not exactly the same, is a first step in the chosen direction. This Friday, the US will release September Retail Sales and Inflation figures, these last higher yearly basis, but not for much.
The EUR/USD pair fell down to 1.1826, bouncing modestly from the level, but holding nearby ahead of the Asian opening, overall poised to extend its decline in the short-term, moreover if the price manages to break below the key support in the 1.1820/30 region. The level has proved strong in the past, while it also stands for the 23.6% retracement of this month's rally. The 4 hours chart shows that technical indicators keep retreating from overbought levels, still in positive territory, while a bullish 20 SMA extends above the 100 SMA below the current level, a sign that the ongoing decline could be just corrective. The 38.2% retracement of the mentioned rally comes at 1.1795, the level to break to confirm additional declines ahead.
Support levels: 1.1825 1.1795 1.1760
Resistance levels: 1.1890 1.1930 1.1965
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.
