Key Points
- The Euro remained under a bearish pressure against the US dollar, and may continue to move down.
- The EURUSD pair broke a major support on the hourly chart, which may now act as a resistance for the buyers.
- Euro Area Industrial Production released by the Eurostat posted a rise of 1.1% in April 2016, which was more than the forecast of 0.7%.
- Euro Area Employment Change was also released, which came in at +0.3% in Q1 2016.
Technical Analysis
The Euro was crushed recently against the US Dollar, as the shared currency traded below the 1.1250 support area. There was a triangle pattern break noted on the hourly chart of the EURUSD pair, which further ignited a downside move.
If the pair corrects higher, then the broken triangle trend line along with the 38.2% Fib retracement level of the last drop from the 1.1304 high to 1.1209 low may act as a resistance for the pair.
One can consider selling rallies as long as the pair is below the 1.1260 level.
Euro Area Industrial Production
Today, the Euro Area Industrial Production was released by the Eurostat. The market was expecting the volume of production of Industries such as factories and manufacturing to increase by 0.7% in April 2016, compared with the previous month. The result was above the forecast, as there was an increase of 1.1% in the production in April 2016.
In terms of the yearly change, the Euro Area Industrial Production rose 2% in April 2016, which was again above the forecast of 1.3%. The report stated that the “increase of 1.1% in industrial production in the euro area in April 2016, compared with March 2016, is due to production of durable consumer goods rising by 2.3%, capital goods by 1.9%, non-durable consumer goods by 1.6%, intermediate goods by 0.4% and energy by 0.3%”.
There is a chance of a recovery in the EURUSD pair, but is may face sellers near the 1.1240-50 levels.
