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Euro Currency Challenges a Rising Trend Line

The world’s most liquid currency exchange rate, the EUR/USD, is not looking lie it is in a good place as we enter the last half of the week. Looking at the above daily MT 4 chart, the euro currency (EUR) has failed to close above the key psychological barrier in play at 1.19 and is now challenging a rising trend line support level.

The economic calendar out of the European Union is fairly quiet. The Eurozone will publish monthly trade balance data. With that said, the euro currency as well as the U.S. dollar (USD) will be affected by the U.S. economic calendar.

All eyes will be on the U.S. Federal Reserve Board (Fed) as their monetary policy arm, the Federal Open Market Committee (FOMC) will announce their monthly monetary policy and rate decision.

The FOMC is not expected to make any moves with monetary policy or rates. This means that Forex traders will be closely scrutinizing their monetary policy statement, for any clues about future decisions, as well as the FOMC press conference.

The United Kingdom is publishing monthly inflation data. This includes the monthly core and headline consumer price index (CPI) as well as monthly core and headline factory gate prices, the producer price index (PPI). Britain will also publish their monthly housing price index (HPI) as well as the monthly month RPI gauge.

Canada is also releasing inflation data. The Great White North will release monthly core and headline consumer price index data. They will also publish monthly foreign securities purchases data.

Daily Euro Technical Analysis (EUR/USD)           

Looking at price action on the above MT 4 chart, the euro currency has tried at least two times, the last time being on Tuesday, to close above 1.19. After failing at 1.19 the EUR/USD Forex market then fell to 1.1846/5 as an inverted bearish hammer candlestick was formed.

Looking at the 14 day relative strength index (RSI), there are a series of lower highs as this technical indicator trends lower signaling more losses could happen in this key Forex market.

The rising trend line, in play since 14 May, support is in play at 1.1815/6. This is also the 10 July low price point. The next downside barrier lines up at the 9 September low price at 1.1753.

For the bulls to enter this market, a daily close above 1.19 is needed. The next upside barrier lines up at 1.1950.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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