How to trade the Euro-zone Flash CPI with EUR/USD
- The fresh inflation report is watched closely by the ECB and moves the Euro.
- The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.
- The EURUSD moved, on average, 10 pips in the 15 minutes after the data release and 31 pips in the following 4 hours
Buying EUR/USD Scenario
- Tradable Positive Trigger: +1.41 deviation (2.26%) [BUY Pair]
Key Resistance Level: 1.1735
This time, if it comes out at higher than expected with a relative deviation of 1.41 or higher(2.26 or higher in actual terms), the pair may go up reaching a range of 13 pips in the first 15 minutes and 64 pips in the following 4 hours.
1.1735 capped the pair on Wednesday. More robust resistance awaits at 1.1750, which was a quadruple top from July. 1.1795 held it down in July and 1.1850 was a peak on June 14th.
Selling EUR/USD Scenario
- Tradable Negative Trigger: -2.0412 deviation (1.855%) [SELL Pair]
- Fundamental Support Level: 1.1655
If it comes out lower than expected at a relative deviation of -2.0412 or less(1.855 or lower in actual terms), the EURUSD may go down reaching a range of 20 pips in the first 15 minutes and 61 pips in the following 4 hours.
1.1655 was a low point earlier in the week, and 1.1625 capped the pair in mid-August. Further down, 1.1595 and 1.1530 are notable
EUR/USD Levels on the Chart
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More data
The European Central Bank has only one goal: inflation at or a bit below 2%. Prices have increased thanks tot he efforts of the central bank and also the increase in oil prices.
In the last five releases, the EURUSD moved, on average, 10 pips in the 15 minutes after the data release and 31 pips in the following 4 hours. The previous release had a no surprise.
Follow the publication of the figure on the economic calendar. Watch out for the data from the Market Impact tool, projecting the potential price changes according to the deviation. Here is the Market Impact Studies Users Guide.
Author
Yohay Elam
FXStreet
Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.
