The Euro continued to march higher in January to trade at $1.0867, the highest level since April last year, and benefitting from a softer dollar, as investors expect the Fed to slow the pace of rate increases after the US CPI report pointed to another slowdown in inflationary pressures. In Europe meanwhile, preliminary estimates showed price pressures eased more than expected, with the annual inflation rate in the Eurozone hitting a four-month low.
Technically, the pair made an upward breakout yesterday with a strong positive bar. If it stays above 1.08 levels, it could move towards the 1.0910/15 region, which also coincides with the ceiling of the ascending channel. On the downside, the 1.0800 level is as seen support. If it breaks downward, the strong support level is at 1.0630 (21-DMA).
Support: 1.0800 – 1.0735 – 1.0630
Resistance: 1.0890 – 1.0910 – 1.0930