The Euro (EUR) inched lower against the US Dollar (USD) on Monday, decreasing the price of EUR/USD to less than 1.1000 ahead of the Germany’s industrial production report which is considered a key gauge for economic activity. The technical bias remains bullish because of a higher high in the recent upside wave.
As of this writing, the pair is being traded around 1.0983. A hurdle may be noted near 1.1000, the psychological number ahead of 1.1021, the high of the last major upside rally and then 1.1094, a key horizontal resistance area on higher timeframes. A break and four-hour closing above the 1.1094 resistance shall incite renewed buying interest, validating a move towards the 1.1260 resistance zone which is another major resistance level.
On the downside, a support may be seen near 1.0922, an immediate trendline support as demonstrated with red color in the given above chart along with the 23.6% fib level. A break and hourly closing below the 1.0922 support shall incite renewed selling pressure, validating a move towards the 1.0805 which is the 50% fib level. The technical bias shall remain bullish as long as the 1.0805 support zone is intact.
How EUR/USD Reacted on Past Industrial Production Releases?
The EUR/USD rose by 35 pips after the release of last industrial production report from Germany on 7th April, 2017 as the actual outcome was 2.2% as compared to the forecast of -0.2%.
The pair, however, didn’t show any noticeable volatility after the release of March’s industrial production news as the actual outcome was 2.8% as compared to the same forecast.
Selling the pair around current levels may be a good strategy if the industrial production report misses the average forecast and vice versa.
What Assets to Trade?
In addition to EUR/USD, trading EURGBP, EURCAD and EURAUD may also be a good move as the aforementioned pairs are highly reactive to the Germany’s industrial production news.