EUR/USD: bullish view
EUR/USD extended gains on Wednesday, touching $1.3330. Later the pair eased lower after meeting sell orders clustered in the $1.3340/50 area. Yesterday the bulls managed to close day above the key $1.3300 level. German final CPI came in line with forecasts at +0.4% m/m. The ECB’s executive board member Benoit Coeure will speak today on the role of central banks in managing crisis and growth. The euro area will release industrial production figures at 09:00 GMT (forecast – contraction). Also watch the headings from the second day of German Constitutional Court hearing on the legitimacy of the ECB’s OMT program today.
From the technical viewpoint, break above $1.3300 is a strong buying signal. Bulls cleared the way up, so the single currency could extend gains towards the $1.3500. Note that there is a MACD divergence on the H4 chart and that the market is overbought, so we concede a correction lower. Support lies at $1.3250, $1.3200 and $1.3175.
Chart. H4 EUR/USD