EUR/USD: Euro breaks below upward rising channel support

The EUR/USD is struggling to decide what direction to take on Wednesday ahead of key US inflation data, while a set of positive macro data failed to support it on the upside.

While moving sideways, the EUR/USD has broken the upward rising channel support line and also fell below 50% Fibonacci retracement level of $1.2365 in an indication of a trend change. The EUR/USD has been moving within the upward rising channel since Monday this week. The technical indicators including Momentum, Slow Stochastics, and the Relative Strength Index are pointing downwards on a 15-minute chart confirming that the breakout might still gather strength.

Key US inflation data are due later on the day with the market expecting a deceleration of core inflation to 1.7% y/y. The US Dollar was under pressure for last few days as investors worry that the rise in US inflation will result in continuous equity market selloff that is weighing on the US Dollar.

Macro data published earlier on Wednesday saw German GDP rising 0.6% over the quarter in Q4 2017, meeting the market expectations. At the same time, German inflation fell 0.7% m/m in January while rising 1.7% over the year, dwelling well off ECB 2% inflation target.

The Eurozone GDP rose 0.6% over the quarter in Q4 while Eurozone industrial production increased 0.4% m/m in December.

German Bundesbank is organizing the symposium on future of money with headliners including Jens Weidmann, the Bundesbank president, Swiss SNB board member Zurbrugg and ECB executive board member Yves Mersch.

EUR/USD 15-minute chart

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