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James Hyerczyk
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EUR/USD

The Euro is trading nearly flat shortly ahead of the U.S. opening on Friday as Treasury yields edged slightly higher, underpinning the U.S. Dollar. Yields rebounded with the 10-year rate having fallen to 1.53% in the previous session.

In economic news, Euro Zone inflation accelerated as initially estimated in March, driven mainly by more expensive services and energy, data from the European Union’s statistics office Eurostat showed on Friday.

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At 10:48 GMT, the EUR/USD is trading 1.1987, up 0.0021 or +0.17%.

Eurostat confirmed its earlier estimates that consumer prices in the 19 countries sharing the Euro rose 0.9% month-on-month for a 1.3% year-on-year increase, accelerating from a 0.9% year-on-year rate in January and February.

The European Central Bank wants to keep inflation below, but close to 2% over the medium term.

In the U.S., data for the number of building permits authorized in March, along with the number of new housing construction projects that started last month, is due out at 12:30 GMT.

The University of Michigan’s April preliminary inflation expectation and consumer sentiment data is then expected out at 12:30 GMT.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up on Thursday when buyers took out 1.1989 and 1.1990.

A trade through 1.1704 will change the main trend to down. This is highly unlikely, but due to the prolonged move up in terms of price and time, the EUR/USD is vulnerable to a closing price reversal top.

The main range is 1.1603 to 1.2349. The EUR/USD is currently trading on the strong side of its retracement zone at 1.1976 to 1.1888, giving the Forex pair an upside bias.

The short-term range is 1.2243 to 1.1704. The EUR/USD is currently trading inside its retracement zone at 1.1974 to 1.2037. Trader reaction to this area will set the short-term tone.

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Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Friday is likely to be determined by trader reaction to the 50% level at 1.1976.

Bullish Tone

A sustained move over 1.1976 will indicate the presence of buyers. The first upside target is the Fibonacci level at 1.2037. This level is a potential trigger point for an acceleration to the upside. The daily chart indicates there is no resistance until 1.2243.

Bearish Tone

A sustained move under 1.1976 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the main Fibonacci level at 1.1888.

Side Notes

A close under 1.1966 will form a closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day correction.

For a look at all of today’s economic events, check out our economic calendar.
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