EUR/USD: strong US data backs the case of a downward correction

EUR/USD Current price: 1.1842

Dollar's negative momentum eased during London trading hours, leading to a pullback of the EUR/USD pair from a fresh 2-week high of 1.1879. The pair eased in spite of positive news coming from the EU, as local industrial production rose by more-than-expected in August, up by 1.4% in the month, from a revised 0.3% in July, and surging by 3.8% yearly basis, beating expectations of 2.5%. The pair fell down to the 1.1850 region, where it consolidate ahead of US data, which came in positive, fueling dollar's short-term strength. Weekly unemployment claims for the week ended October 6th fell to 243K, against the expected 251K. The producer price index rose by 0.4% as expected, although the yearly reading ticked higher, up to 2.6% from previous  2.4%. The core figures, were also above forecasts and August numbers.

Ahead of ECB's Draghi and a couple of Fed's officers speeches, the EUR/USD pair extends its decline below the mentioned low, further supporting the case of an ongoing bearish correction as commented on a previous update. Also, the 4 hours chart shows that technical indicators have extended their bearish slopes, still holding above their mid-lines, whilst the 20 SMA is crossing above the 100 SMA, both around 1.1800 and limiting chances of a more long-lasting decline. However, a break below the 1.1820/30 region should keep the pair on the negative side this Thursday,  with scope to extend its decline down to 1.1750.

Support levels: 1.1825 1.1790 1.1750

Resistance levels: 1.1890 1.1930 1.1965

View Live Chart for the EUR/USD

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