Last trading week was bullish from the common European currency. EURUSD managed to close the trading week around the 2-wek high of 1,3650.
Today, on June 30th, the currency pair resumed the rally from 1,3639 started last week. At the beginning of the European trading session, EURUSD went up to 1,3659, thereby setting a new weekly low, Market Leader reports.
It appears that the common currency is gaining value on stable inflation rate in the Eurozone. This is the last trading day of the month, the quarter and the first half of the year.
So, the day will be rich in economic reports from the Eurozone.
This morning, Germany released its retail sales report. This one is a major indicator for the common currency and is related to consumer confidence. January's figures indicated a decline down to -2,5%, which was the lowest level. The, the index rallied up to +2,5% in February, which is still the high of the year. The readings have been going down ever since in May, the index went back to the negative zone, thereby reaching -1,5% against economists’ positive expectations. This time, experts were positive as well while expecting +0,7% but the report failed to come up to their expectations, thereby confirming that the index is still negative (-0,6%) even though better than May's figures (-1,5%).
In a couple of hours, there was a press release on inflation. The Eurozone's CPI has been relatively stable for 4 months. The index stayed at 0.5, thereby matching expectations.
Anemic economic growth coupled with slow inflation urged Mario Draghi and the ECB to make several changes to their policies, including lowering the benchmark interest rate down to the record low of 0,15% while introducing negative deposit rates and targeted credits to restore lending and growth. Keeping in mind the fact that the inflation rate has been far below the 2% target for 9 months, economists say that the ECB may go on with the stimuli to prevent inflation from falling down, which supports the Euro.
Meanwhile, Masterforex-V Academy conducted comprehensive analysis to find out the near-term prospects of EURUSD.
The H1 chart indicates a mid-term bullish trend developing from 1,3512. The trend in question contains the 1.3512-1.3650 upswing (a 3-wave count) as well as a bearish reaction - 1.3650-1.3575 – slightly over 50% Fibo.
Further on, a new bullish momentum is underway from 1,3575. At this point, the price has already outlined a bullish MF sloping channel (dashed sloping line in the chart below)
The price has already come over the 1,3650 high, which is a bullish signal as well. The new momentum already has 3 sub-waves inside. Intraday resistance: 1.3650 + 1.3664 + 1.3696.
Still, we may face a reaction to the entire bullish trend, Masterforex-V Academy reports.
Intraday support: 1.3639; 1.3610, 1.3582, 1.3565 + 1.3535 and 1.3512.
