Investors Interested In USD While Escaping Risks

The major currency pair retreated last Friday and this decline continues today, January 14. So far, EURUSD investors are analyzing the news and macroeconomic reports and trying to escape risks. It supports the USD and puts pressure on stock indexes. At the same time, investors barely paid any attention to the CPI report published by the USA last week. 

According to the report, the inflation lost 0.1% m/m in December, just as expected. By the way, in November the indicator did not change. It is the lowest CPI value since March 2018. On YoY, the indicator was 1.9% in December after being 2.2% the month before. It is interesting that the Core CPI expanded by 0.2% m/m at the end of 2018. 

Talking about investors trying to escape risks, everything remains the same: duration of the Government Shutdown in the USA reached stratospheric levels. Several agencies haven’t been operating for almost 24 days. The Congress still hasn’t agreed on financing the Mexican issue, that’s why policymakers can’t get back to work: they are on unpaid leave and this is rather negative signal. 

As long as the American Government doesn’t restore its routine operations, the USD will have a chance to recover and get stronger. 

From the technical point of view, EURUSD is trading inside a mid-term ascending correctional channel. Currently, the pair has rebounded from the mid-term resistance line and right now is forming a short-term downtrend. In the H1 chart, one can see that the price is testing the downside border of the current channel. If the pair breaks the support line at 1.1453, the instrument may continue falling towards the projected support line at 1.1350. Another possible scenario implies that the price may complete the current downtrend and resume trading upwards to reach the resistance line at 1.1510. If the pair breaks the local resistance level, the instrument may start a new impulse inside the mid-term correctional trend with the closest target at 1.1560.