The common European currency started this trading week on a bullish note. In particular, at the beginning of today's European trading session, the currency pair traded within the scope of the 1.3420-1.3438 price range. Still, later on, the common currency made a bullish attempt and rallied up to 1,3441 against the US Dollar, Market Leader reports.
Euro Gains Value As ECB Fights Deflation
When the European Central Bank applied a range of stimuli in June, the central bankers warned the markets possible economic standstill before the stimuli have some effect. This week's economic reports scheduled for the Eurozone may well test the ECB's expectations.
The rate of inflation in the Eurozone remained low at 0,5%. This is the third consecutive month, including July, when the rate remains that low. At the same time, the rate of unemployment in Europe remains unchanged at 11,6%. This may result in higher concerns among European authorities as they are more likely to implement further stimuli.
The ECB revealed a range of measures, including negative deposit interest rates and targeted long-term credits last month. This package of measures helped European bonds overcome the average yield.
This helped to strengthen industrial and service sectors. Still, the ECB has to show its influence on price growth and lending while the geopolitical risks around Ukraine and Russia threaten to undermine the economic recovery in the region.
Forex
According to the experts working for Masterforex-V Academy, the technical analysis of the H1 EURUSD shows the following picture:
The current bias is still bearish despite a bullish reaction. The growth is going on from 1.3650.
The current move includes 2 waves of a bigger time frame: 1.3650-1.3589 + 1.3589-1.3639.
Further on, the price is developing a 3rd wave starting from 1.3639. This is a 5-wave count.
The 5 sub-waves are marked blue in the graph below. Still, the 5th sub-wave started at 1.3484 is still incomplete.
This morning, the price formed a tight price range between 1.3420 and 1.3437. A true break out of the range will show us the true market intension for the trading day.
