EURUSD fails to hold above 200-day moving average. Post-PPI spike falls short of testing key 1.05 level. Daily candle gives some hope to bears after brutal few weeks.
took another sharp leg lower in the minutes following 8:30 EST as market participants rejoiced over yet another soft inflation print. Consecutive soft prints in CPI and PPI haveAfter printing a session high of 1.0481, a retracement back below the 200-day moving average materialized as the US Dollar rebounded slightly.
When we look at the daily timeframe on EURUSD, we can see the clear break of descending trendline resistance has turned into a massive breakout. That trendline resistance had penned in price for the entirety of this move lower throughout the year, with each advance getting rejected. But this resistance broke as the market caught a scent of a potential slowdown from the Federal Reserve. Less than two weeks ago, EURUSD was trading below 0.9750. As we now sit just shy of the 1.
Looking at Tuesday’s action, it is notable that bulls were unable to even test the 1.05 area. Their advance was immediately sold down to the key 1.0365 level, a spot that EURUSD has failed to close above for the last two sessions. I will be keeping this level in mind into the end of the session, as a close above indicates bulls are not yet ready to rollover. That being said, the long wick on the daily candle does worry me, as it shows bears are starting to dig their heels in.
With all this in mind, EURUSD may look to revisit that 200-day moving average once again or even the 1.05 psychological level should there be some overshoot. Should a broad
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