Key Points
- The Euro after trading as low as 1.1040 against the US Dollar found buyers and moved higher.
- There was a bearish trend line formed on the hourly chart of the EURUSD pair, which was broken during the upside move.
- Today, the US Import Price Index released by the US Department of Labor posted a rise of 0.2% in June 2016, less than the forecast of 0.5%.
- The US Export Price Index was a bit higher, as it posted a rise of 0.8%, more than the forecast of 0.3%.
Technical Analysis
The Euro recently declined towards the 1.1040 level against the US Dollar where the bulls appeared and pushed the price higher. The EURUSD pair also broke a bearish trend line formed on the hourly chart to open the doors for more gains.
The pair is currently trading above the 100 hourly simple moving average, and struggling to break the 200 hourly SMA.
A break and close above the 200 hourly SMA could ignite an upside move towards the 1.1120 level.
US Import and Export Price Index
Earlier today, the Import Price Index, which informs the changes in the price of imported products into the US was released by the US Department of Labor. The market was expecting a rise of 0.5% in June 2016, compared with the previous month. However, the increase in the IPI was 0.2%.
The report stated that “All Imports: Prices for U.S. imports continued to trend up in June, rising 0.2 percent, after increasing 2.6 percent between February and May. That was the largest 3-month rise since import prices increased 5.8 percent between February and May 2011. Most of the recent increase in import prices was led by higher fuel prices. Despite the recent advances, import prices remain down on a 12-month basis, falling 4.8 percent for the year ended in June “.
Overall, the US dollar may move down in the short term, which means there is a chance of more gains in EURUSD.
