Euro to US Dollar gained traction lately, as the EUR/USD pair traded towards $1.1100. Can the exchange rate appreciate further or will it decline in the near term?
The Euro after finding continuous bids at the $1.0950 support area against the US Dollar traded higher and moved above the $1.1000 resistance area. Currently, the EUR/USD pair is facing a major resistance area at $1.1110-20 levels, which may play a crucial role moving ahead.
Can EUR/USD Bulls Gain Momentum?
If we have a look at the 4-hours chart of Euro to dollar, then there is a major resistance and support trend line formed. On the upside, the resistance trend line is positioned with the 200 simple moving average, which is currently acting as a hurdle for more gains.
If the EUR/USD pair continues to face offers near the highlighted resistance area with red, then there is a chance of a minor dip.
On the downside, the 100 SMA can be seen as a support area currently at $1.1040. In my view, there is a chance of a minor dip before the pair can attempt to break the resistance area.
German Consumer Price Index
Today, the Euro Zone saw the release of the Germany consumer price index by the Statistiches Bundesamt Deutschland. The market was positioned for a rise of 0.2% in the CPI in July 2016 (preliminary), compared with the previous month.
However, the result was encouraging for the Euro, as the CPI rose 0.3%. Moreover, the HICP is an index of consumer prices calculated is forecasted to rise by 0.4% in July 2016. The report published stated that:
The inflation rate in Germany as measured by the consumer price index is expected to be +0.4% in July 2016. Based on the results available so far, the Federal Statistical Office (Destatis) also reports that the consumer prices are expected to increase by 0.3% on June 2016.
Overall, the market sentiment is positive for the Euro and one may consider buying dips with a stop below the 1.1040 levels.
Euro Dollar Support Levels
1.1080 And 1.1040
Euro Dollar Resistance Levels
1.1120 And 1.1140