Key Points
- Euro opened with a gap higher versus the Swiss Franc, and currently attempting to close the gap level.
- The EURCHF pair is trading near the 200 hourly simple moving average, which is acting as a support area.
- German Producer Price Index released by the Statistisches Bundesamt Deutschland posted a rise of 0.4% in May 2016, more than the forecast.
- In terms of the yearly change, the German Producer Price Index declined by 2.7%, less than the last decrease of -3.1%.
Technical Analysis
The Euro enjoyed a decent upside move against the Swiss Franc, and opened with a gap higher. The EURCHF pair traded as high as 1.0909, and currently correcting lower. There is a channel pattern formed on the EURCHF pair, which may act as a support area.
The pair is currently finding bids near the 200 hourly simple moving average, but there is a chance of a dip to close the gap.
However, if the pair dips from the current levels, then one may consider buying in the near term.
German Producer Price Index
Today in the Euro Zone, the German Producer Price Index was released by the Statistisches Bundesamt Deutschland. The market was expecting the average changes in prices in the German primary markets to increase by around 0.2% in May 2016. However, the result was encouraging, as there was a rise of 0.4%.
The report stated that “In May 2016 the index of producer prices for industrial products fell by 2.7% compared with the corresponding month of the preceding year. In April 2016 the annual rate of change all over had been –3.1%”.
Overall, the EURCHF pair is in an uptrend, and as long as the channel support holds, it may move towards 1.0920.
