EUR/USD is flat lined at one-month lows, eyes US data

The EUR / USD dropped to 1.0561, the lowest level since January 11 after hawkish comments from Yellen pushed up the treasury yields. 

The pair continues to trade just above the one month low, with investors eyeing US CPI and retail sales release, due later today. 

Eurozone trade balance is non-event

The Eurozone trade data is likely to show a seasonally adjusted surplus of EUR 2.5 billion in December. However, the data could receive little attention from the markets in the wake of Yellen’s hawkish testimony and ahead of the US data release. 


The CPI is seen rising 2.4% y/y in January. The Fed may look through transitory factory, hence markets would be more interested to see if the core inflation is catching up with the headline figure. The strong CPI reading could boost the treasury yields and the US dollar. Meanwhile, the US retail sales growth is slowing to just 0.1%. 
In Europe, periphery-German yield spread could play a major role in determining the exchange rate. 

EUR/USD Technical Levels

The spot was last seen trading around 1.0575. A breakdown of support at 1.0567 (23.6% of trump drop) could yield a drop to 1.0511 (Jan 9 low) and then to 1.0499 (Dec 22 high). On the other hand, a break above 1.0605 (5-DMA) would expose 1.0670 (10-DMA), above which the resistance at 1.07 could be put to test. 

  TREND INDEX OB/OS INDEX VOLATILY INDEX
15M Strongly Bearish Neutral High
1H Bearish Neutral Low
4H Bullish Overbought Expanding
1D Strongly Bearish Neutral Expanding
1W Strongly Bearish Neutral Shrinking

 

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