EUR/USD Predication for August 31, 2016

The EUR/USD declined following data that showed inflation in Europe was continuing to slow.  Support is seen near an upward sloping trend line that connects the lows in June to the low in July and comes in near 1.10.  Momentum has turned negative as the MACD (moving average convergence divergence) index generated a sell signal. This occurs as the spread (the 12-day moving average minus the 26-day moving average) crosses below the 9-day moving average of the spread.  The index is printing in the red with a downward sloping trajectory which points to lower prices for the exchange rate.

German HICP inflation unexpectedly fell back to 0.3% year over year from 0.4% year over year in the previous month and against initial expectations for a rise to 0.5% year over year.Prior state data which showed that inflation was unchanged did not materialize on the national level.