Key Points
- Euro is currently consolidating in a range against the Swiss Franc, and may be heading towards a break.
- There is a contracting triangle pattern formed on the hourly chart of the EURCHF pair, which may play a crucial role.
- In the Euro Area, the Sentix Investor Confidence released by the Sentix GmbH posted a major decline from the last reading of 9.9 to 1.7 in July 2016.
- The Euro Area Producer Price Index (PPI) released by the Eurostat posted a rise of 0.6%, more than the forecast in May 2016.
Technical Analysis
The Euro traded mixed against the Swiss Franc recently, but it looks it is approaching a major break in the near term. There is contracting triangle pattern formed on the hourly chart of the EURCHF pair, which may provide us the next move.
The upper trend line resistance is coinciding with the 100 and 50 hourly simple moving average, suggesting the importance of the break.
The chances of a break down are more compared with a move higher in the near term.
Euro Area Producer Price Index
In the Euro Area, the Producer Price Index (PPI) was reported by the Eurostat. The market was aligned for the index that measures the change in prices received by domestic producers of commodities in all stages of processing (crude materials, intermediate materials, and finished goods) to increase by 0.3%. However, the result was positive, as there was an increase of 0.6%.
The report added that “The 0.6% increase in industrial producer prices in total industry in the euro area in May 2016, compared with April 2016, is due to rises of 1.7% in the energy sector, of 0.3% for intermediate goods and of 0.1% for non-durable consumer goods. Prices remained stable for both capital goods and durable consumer goods. Prices in total industry excluding energy increased by 0.2%“.
Overall, let’s wait for a break to trade the next move in the EURCHF pair.
