Morning outlook - EUR/USD tries to bypass 1.20 level
- In line with expectations, a resistance created by the 55- and 100-hour SMAs prevented the further advance of the Euro against the Greenback.
- At the moment, this barrier is also strengthened by the weekly PP. For this reason, the pair is expected to fail to break to the top.
- However, a sharp decline should not happen as well, as the southern side remains reliably protected by the 200-hour SMA, which is moving along the lower support line of a long-term ascending channel.
- In other words, the rate is expected to stay for some time in this ascending triangle.
- On the other hand, an effect from release of data on the US PMI at 12:30 GMT might give a necessary impulse to bypass the above resistance a stay for some above the 1.9999 mark.
Due to release of negative data in the United States on Producer Price Index the currency exchange rate made suddenly dropped down to the monthly PP, which is located at the 1.1881 level.
In result of this action, the pair broke through the lower trend-line of a three month long senior ascending channel.
At the moment, the only barrier that it faces from the south is the bottom edge of another more recently formed ascending channel. In this sense, the buck might drag the pair even lower.
On the other hand, the pair is likely is stuck near the above monthly PP for some time, while traders are anticipating a release of data on the US CPI at 12:30 GMT.
Accordingly, the positive result will strengthen the downside momentum even more, while the negative will give the Euro a necessary impulse to recover from yesterday's loss.