EURUSD at correction after 1.1880 high earlier?

EURUSD, H1 and H4

The dollar has continued to track lower, this time following the release of the minutes to the September FOMC meeting. While overall maintaining expectations for a 25 bp hike in the funds rate, the minutes weakened the conviction for this a tad, with some policymakers expressing concern that low inflation was not “transitory.” The narrow trade-weighted USD index has seen a low of 92.64, which is the lowest level seen since September 26.

Meanwhile, EURUSD lifted for a fifth consecutive session, logging a 17-day peak of 1.1880, and today is still continues moving above 1.1850 area, even if we are seeing a slight correction downwards for the last 3 hours. In the Daily chart, the pair formed 4 upwards consecutive Daily candles and manage to broke yesterday the 20-DAY MA. However has not still manage to get back in the upwards channel seen since April.  In a shorter time-frames such as the  4-hour candles , the pair still seems positive despite the correction seen earlier, since it did not manage to break the support trend line drawn  since Monday (immediate support in an hourly chart at 1.1850), while  Parabolic SAR remain positive and RSI is still above 70.

The 1-hour chart agrees once again with the wider picture of the pair, since it keeps moving above 20-period MA, by creating higher low/upper fractals. In the 1-hour chart the doji candle seen on London opening along with consolidation seen at the 20-period MA ( around 1.1860) suggested that bulls are still in the market and triggered Long Positions in both hourly and 4-hour time frames. Once EU industrial production came out higher than anticipated , an entry was taken at the new hourly opening, at 20-period MA, at 1.1861. Target was above the recent upper fractal, at 1.1885, while support was set at 1.1830,  which is a confluence of ATR (14) and below low Fractal.

In the 4-hour chart, Targets were set at 1.1910 ( Between 50.0-61.8 Fibbonacci since September’s peak)  and 1.1940, with support at the 200-period EMA, at 1.1820.

As mentioned, Eurozone industrial production higher than anticipated in August. Variations over the summer are partly due to the timing of school holidays, but the strong annual rate over both months ties in with the signals from survey data that show ongoing robust growth over the summer. More arguments then for the hawkish camp at the ECB, although with political risks and uncertainties still hanging over the union there doesn’t seem to be a majority in favor of a firm commitment to an end date for QE just yet.