CPI the Key Driver of the Euro

EUR/USD Analysis 13 Nov 2017

EUR/USD Spot Price: 1.1651

Support: 1.1624, 1.1678, 1.1591

Resistance: 1.1678, 1.1691, 1.1700

• Position: Short
• Entry Point: 1.1693
• Take Profit: 1.1600
• Stop Loss: 1.1750

Trade Ideas - Shorting the Top End

We nudged our heads above 1.1650 to close out last week, but as yet we can’t break resistance. This is a great place to be looking for short opportunities as there is strong selling pressure.

I’m looking to enter short on a push to 1.1693. I’m still targeting the bottom of this range, however 1.1600 is a good profit target.

EUR/USD 240 min Chart - EUR/USD is battling Resistance

CPI and ECB Conference the Big Events

There’s quite a bit of top-tier data present this week and it will have a big impact on how the week plays out. On the data front we get to see CPI from both the US and the Eurozone. The US in particular has all but locked in a rate hike in December. A poor inflation number might do some damage to the chances of that happening, although the talk around suggests it’s virtually a lock.

CPI out of the Eurozone won’t impact the EUR in the same fashion as it appears a rate rise isn’t immediately on the agenda. However it could hurt the trend and see us spike higher, if inflation is increasing faster than expected.

The other major event to watch out for is on Tuesday, when the ECB hold a special conference in Frankfurt. One of the panels includes the major central banking heads that include, the ECB's Mario Draghi, Bank of Japan Governor Haruhiko Kuroda, Bank of England boss Mark Carney And of course the head of the US Federal Reserve - Chairman Janet Yellen. The presentation is named, "At the heart of policy: challenges and opportunities of central bank communication” and any comments have the potential to shock markets.

Elsewhere US President Donald Trump is pushing on with his proposed tax cuts. He wants to reduce the rate of corporate tax to 20% from 35% However Republicans are holding up proceedings, fearing that they risk re-election if the changes go through.

Key for the Week - US CPI

The USD has been taking the lead in recent weeks, so it’s likely that the inflation data will be the most important out of the US. We want to see a strong number, which will give the US Federal Reserve the ability to hike rates in December and potentially do more in 2018.

Technical Analysis - The Key Levels

The EUR/USD is still struggling with the 1.1650 resistance level. We are currently right around that mark, but for the most part we just haven’t been able to push through.

EUR/USD - Key Levels