Key Points
- The Euro tumbled vs the US Dollar recently, as it traded below a major support area of 1.1300.
- There was a bullish trend line formed on the hourly chart of the EURUSD pair, which was broken during the downside move.
- Euro Zone CPI released by the Eurostat posted a decline of 0.2% in April 2016, as per the market forecast.
- In terms of the monthly change, the Euro Zone Consumer Price Index remained flat at 0%, which was again less than the forecast.
Technical Analysis
The Euro fell sharply vs the US Dollar during the past couple of sessions, and also broke the 50 hourly simple moving average support area. There was also a bullish trend line formed on the hourly chart of the EURUSD pair, which was cleared.
Overall, the pair broke a couple of important support levels, and traded as low as 1.1256.
If the pair corrects higher from the current levels, then the 38.2% Fib retracement level of the last drop from the 1.1348 high to 1.1256 low may act as a resistance area.
Euro Zone CPI
In the Euro Zone, Consumer Price Index, which is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services was released by the Eurostat. The forecast was slated for a decline of 0.2% in the CPI in April 2016, compared with the same month a year ago, and the result was as per the forecast.
When we look at the monthly change, then the Euro Zone CPI remained flat at 0%. The report stated that “In April 2016, negative annual rates were observed in seventeen Member States. The lowest annual rates were registered in Romania (-2.6%), Bulgaria (-2.5%) and Cyprus (-2.1%). The highest annual rates were recorded in Belgium (1.5%) and Sweden (1.0%). Compared with March 2016, annual inflation fell in thirteen Member States, remained stable in seven and rose in eight”.
Overall, the Euro buyers got nothing to cheer, and as a result, there may be more losses in the Euro moving ahead.
