Weekly Technical Analysis EURUSD
The US dollar extended losses last week, hitting a three-year low against a basket of major currencies. US January headline CPI rises higher than expected. The Consumer Price index rose 2.1% for the 12 months ending January, the same increase as for the 12 months ending December. However, it did not support the greenback. US dollar tumbled after January’s Inflation Report.
Looking ahead, we will focus on the FOMC meeting notes from the US on Wednesday. It is so significant release for the FX market and this should give a more detailed explanation of January meeting. The Federal Reserve kept interest rates unchanged at 1.25% - 1.50% at the last meeting. The Fed said the inflation remained low but is expected to move up in the coming months.
Additionally, The Eurozone CPI inflation will be announced on Friday and it is expected to decline -0.9% in January which will carry y/y inflation to 1.3% as the same as a month ago. On the other hand, Core inflation is expected to rise to 1.0% from 0.9% a month earlier. A higher than expected reading should be taken as positive for the single currency.
The EUR/USD pair reached it is a three-year highest level and then showed a profit taking action on Friday. The price closed last week above the main support level of 1.2384. As long as the price stays above 1.2384, on a four hourly basis, The euro may gain more value versus the greenback and we will face 1.2465 and 1.2521 as resistance levels. On the other hand, if the pair drops below 1.2384, the next daily support level can be found at 1.2314.