The EUR/USD has dropped sharply in the Asian and the European trading sessions, reaching the 1.0521 level, but the buyers have stepped in after the United States economic data was released. The rate has edged higher even if the we had very good numbers from the US, the greenback has lost significant ground versus all its rivals as the US dollar index has decreased significantly and has erased the today’s gains.
The US dollar index is trading much above the 101.00 level right now, could still increase if will stay above this level, only a further increase will save the USD from downside.
The USD has edged lower in the afternoon, even if the United States CPI rose by 0.6% in January, more versus the 0.3% estimate, has increased more also versus the 0.3% growth from December 2016, while the Core CPI surged by 0.3%, beating the 0.2% prediction, the indicator has reached the highest growth of the last 5-months. The Retail Sales have increased by 0.4% in January, exceeding the 0.1% estimate, moreover the Core Retail Sales have increased unexpectedly as well, has increased by 0.8%, beating the 0.4% prediction. The empire State Manufacturing has come in better as well, was reported at 18.7 points, higher compared to the 7.2 estimate and much higher versus the 6.5 points in the previous reporting period. The Business Inventories have impressed today, have increased only by 0.4%, less versus the 0.5% prediction and less versus the 0.8% growth in the previous reading period. You can see that we had very good data today, but unfortunately the dollar has decreased sharply in the US trading session, remains to see what will happen tomorrow when the US will release high impact data again.
The price has increased in the afternoon and could approach the broken lower median line (lml) of the minor ascending pitchfork. Has found strong support at the 1.0521 major static support, actually was rejected by this downside obstacle and has failed to close below the median line (ml) of the descending pitchfork. A failure to close below the ML will send the rate higher again, we have an important target at the upper median line (UML) of the descending pitchfork.