- The Euro found support near 1.1175 and corrected higher against the US Dollar.
- A major bullish trend line is forming with support at 1.1195 on the 4-hours chart of EUR/USD.
- The US CPI in April 2019 increased 2.0% (YoY), less than the +2.1% forecast.
- Canada’s unemployment rate declined from 5.8% to 5.7% in April 2019.
EURUSD Technical Analysis
After trading as low as 1.1135, the Euro started a steady rebound against the US Dollar. The EUR/USD pair broke the 1.1175 and 1.1200 resistance levels to move into a short term positive trend.
Looking at the 4-hours chart, the pair formed a strong support near the 1.1175 and 1.1180 levels. As a result, there was an upside break above the 1.1215 resistance, plus the 50% Fib retracement level of the major drop from the 1.1264 high to 1.1135 low.
The pair settled above the 1.1200 level and the 100 simple moving average (4-hours, red). It opened the doors for more gains above the 1.1230 level and the 61.8% Fib retracement level of the major drop from the 1.1264 high to 1.1135 low.
On the upside, the main resistance is near the 1.1260 and 1.1265 levels. If there is an upside break above the 1.1264 swing high, there are chances of a larger recovery towards the 1.1280, 1.1300 and 1.1320 levels.
On the downside, there is a strong support forming near the 1.1200 level. There is also a major bullish trend line in place with support at 1.1195 on the same chart. If there is a daily close below the trend line and 1.1180 support, the pair could move back in a bearish zone.
Fundamentally, the US Consumer Price Index for April 2019 was released by the US Bureau of Labor Statistics. The market was looking for a 2.1% rise in the CPI, compared with the same month a year ago.
However, the actual result was below the forecast, as the UP CPI increased 2.0%, but it was above the last 1.9%. Looking at the monthly change, it came in at 0.3%, down from the last 0.4%.
The report added:
The index for all items less food and energy increased 0.1 percent for the third consecutive month. The indexes for shelter, medical care, education, and new vehicles all rose in April. The indexes for used cars and trucks, apparel, and household furnishings and operations were among those that declined over the month.
Overall, EUR/USD could continue to recover in the short term, but pairs like AUD/USD and GBP/USD declined below key support levels recently and are trading in a bearish zone.
Economic Releases to Watch Today
Japan’s Trade Balance March 2019 – Forecast ¥317.3B, versus ¥489.2B previous.
Japan’s Current Account March 2019 – Forecast ¥2,679.0B, versus ¥2,676.0B previous.