EUR/USD recently had a volatile week after the break above 1.1140 resistance area. On Friday, after a good amount of bearish pressure in the market the price was supported by 20 EMA dynamic support. Last week due to several negative economic reports from the Eurozone, USD gained fresh momentum but that was not quite enough as USD also had a streak of negative economic reports recently. Today, Italian Industrial Production report is going to be published which is expected to show a decrease to 0.2% from 0.4% previously. Tomorrow, Quarterly French Final Non-Farm Payroll report will be published which is expected to be unchanged at 0.3%. These two economic events is expected to provide a good amount of volatility in the market as these are related to production and employment which are among the major economic drivers of the currency. On the USD side, today we don't have any high impact economic report rather than 10-y Bond Auction report which previously was at 2.40|2.3 and it hardly change anythuing due to its inconsistent effect as it carries both growth and risk implications. Tomorrow, we have US PPI report which is expected to show a decrease to 0.0% from 0.5%. As it is one of the leading indicators of consumer inflation, it is expected to have a high impact on USD during its release. To sum up, both currencies in this pair have been impacted by negative economic reports recently which made the market quite volatile and corrective in nature. This week, if we see any strong positive outcome on either currency of this pair, we might see a further gain of the trend or start of a new counter trend.
Now let us look at the technical chart. The price is currently residing above the support area of 1.1140 and recently has bounced off the 20 EMA support. As the price remains above the 20 EMA as well as 1.1140 area we will consider buy positions with a target towards the resistance area of 1.1280-1.1360. The bullish bias is expected to continue until the price breaks below 1.1140 with a daily close.
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