Euro Breaks Higher, Tests New Closing High
The Euro pushed its way through resistance levels on Friday, after attempting to break through during most of the week. Price action is poised to test the December highs near 1.3890, as US yields declined relative to European yields. Data in the US was mixed throughout the week, pushing the US 10-year yield to the lowest levels seen in 2014.
Eurozone inflation has held steady at 0.8% year over year in February, but remains below what European Central Bank President Mario Draghi has called a danger zone of below 1%. Draghi has warned of inflation getting stuck in that zone. Meanwhile, euro-zone unemployment held steady at 12% in January, as expected. The inline data was welcome, but inflation below 1% could generate activity by the ECB when it meets to determine interest rates next week.
US data released on Friday came out in line with expectations. Gross domestic product expanded at a 2.4% rate, according to the Commerce Department. That was down from the 3.2 % pace reported last month and the 4.1% logged in the third quarter. Economists had expected growth would be cut to a 2.5% pace.
The EURUSD is poised to breakout and test the December intra-day highs near 1.3890. A close above 1.3810 would generate a new 6-month closing high. Support on the currency pair is seen near the 10-day moving average at 1.3733.
Momentum on the currency pair is positive with the MACD (moving average convergence divergence) index generating a buy signal. This occurs when the spread (the 12-day moving average minus the 26-day moving average) crosses above the 9-day moving average of the spread. The relative strength index (RSI) moved higher with price action, reflecting accelerating momentum, while printing near 64, which is on the upper end of the neutral range.
Sorry. No data so far.