EUR/USD: correction nears an end
Euro zone industrial production contracted more than expected (-0.5% vs. forecast of -0.2%). Euro slid a bit, to $1.3410 on the news after testing resistance in the $1.3450 area earlier today.
Support is at $1.3300/3295 (Fibo of July-October advance) and $1.3215 (200-day MA). Resistance is at $1.3485, $1.3500 and $1.3547. A close above the letter level is needed to alter the negative prospects. Analysts at SEB corrected their yesterday’s outlook: according to them, the pattern on H4 is not a triangle, but a bearish flag – the pattern will be confirmed in case of the move below $1.3318 which will strongly argue for a fresh low.
Market will be focused tomorrow’s Janet Yellen’s nomination hearings in Congress. For now, the recent solid US data alongside with the ECB’s pledge to keep interest rates at current levels or even lower is likely to keep pressure on the EUR/USD cross in the short to middle term.
Chart. H4 EUR/USD