The Euro (EUR) inched lower against the US Dollar (USD) on Thursday, decreasing the price of EURUSD to less than 1.2000 following some key economic events. The technical bias has turned bullish because of a higher high in the recent upside rally.
EUR/USD Technical Analysis
As of this writing, the pair is being traded near 1.1940. On the upside, a hurdle may be noted around 1.2100 (a short-term horizontal resistance area as well as psychological number) ahead of 1.2176 (a major horizontal resistance) and then 1.2200 (the psychological number). The technical bias shall remain bullish as long as the 1.0839 support area is intact.
On the downside, a support can be noted around 1.1632 (a key horizontal support) ahead of 1.1629 (the low of the last major downside move) and then 1.1600 (the confluence of horizontal support as well as psychological number) as demonstrated in the given above chart.
US Wholesale Inventories
U.S. wholesale inventories rose slightly more than initially estimated in November, suggesting that inventory investment will probably contribute to economic growth in the fourth quarter. The Commerce Department said on Wednesday that wholesale inventories rebounded 0.8 percent after dropping 0.4 percent in October. The department reported last month that wholesale inventories jumped 0.7 percent in November.
The component of wholesale inventories that goes into the calculation of gross domestic product – wholesale stocks excluding autos – also increased 0.8 percent in November. Inventory investment contributed almost eight-tenths of a percentage point to the economy’s 3.2 percent annualized growth pace in the third quarter. Inventory investment accelerated in the third quarter after slowing sharply at the start of 2017.
Trade Idea
Considering the overall technical and fundamental outlook, selling the pair around current levels may be a good strategy in short to medium term.