EUR/USD Bounces Off Despite Downbeat Economic Reports

The Euro (EUR) extended upside movement against the USD (USD) on Thursday, increasing the price of EUR/USD to more than 1.3370 despite the downbeat economic reports. The sentiment remains bearish due to Lower Low and Lower High in the recent waves.

Technical Analysis

As of this writing, the pair is being traded around 1.3377. A support may be seen around 1.3333, the swing low of the recent correction phase ahead of 1.3300, the psychological number and then 1.3294, the low of the last major dip as demonstrated in the following chart.

eur fxopen

On the upside, the pair is expected to face a hurdle near 1.3459, the 76.4% fib level ahead of 1.3561, the 61.8% fib level and then 1.3643 which is a huge confluence level of 50% fib level, 100 Simple Moving Average and 200 Simple Moving Average. The sentiment will remain bearish as far as the 1.3700 resistance area is intact.

Eurozone CPI

 The Consumer Price Index (CPI) –a main gauge for inflation—remained 0.4% in July as compared to 0.5% in the same month of the year before, a report by the EuroStat revealed today, meeting the median projection of different economists. Similarly, the CPI witnessed a negative growth of 0.7% in July as compared to 0.1% growth in the month before, missing the average forecast of -0.6%.

Eurozone GDP

The Eurozone grew at 0.7% in the second quarter as compared to 0.9% in the same quarter of the year before, meeting the projections of economists, a report by the EuroStat revealed today. Similarly, the Eurozone grew at 0.0% in the second quarter as compared to 0.2% in the quarter before, missing the median projection of 0.1%, the report added.

Conclusion

Considering the overall technical and fundamental outlook, buying the pair around the current levels appears to be a good strategy in short to medium term as described above.

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Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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