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James Hyerczyk

The Euro is edging lower on Wednesday after giving back earlier gains. Sellers came in after buyers failed to take on yesterday’s high. The single-currency is currently moving inside Tuesday’s range, but threatening to take out its low. The currency turned lower after a report on Euro Zone inflation confirmed negative in October on weak energy.

At 13:48 GMT, the EUR/USD is trading 1.1854, down 0.0008 or -0.07%.

Euro Zone annual inflation was negative for a third consecutive month in October, matching a four-year low, as energy prices were around 8% lower than a year earlier.

Inflation in the 19 countries sharing the Euro was plus 0.2% month-on-month in October for a 0.3% year-on-year fall, the same annual decline as in September and in line with the initial estimates released at the start of November.

With volatile energy and unprocessed food prices, what the European Central Bank (ECB) calls core inflation, prices rose 0.1% month-on-month and 0.4% year-on-year.

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


Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but the EUR/USD has been struggling to hold on to the trend over the last two weeks.

A trade through 1.1920 will reaffirm the uptrend. The main trend will change to down on a move through the last swing bottom at 1.1745.

The main range is 1.2011 to 1.1603. The EUR/USD is currently trading on the strong side of its retracement zone at 1.1807 to 1.1855, helping to maintain its upside bias. Inside this range is a minor 50% level at 1.1832.

The short-term range is 1.1603 to 1.1920. Its retracement zone at 1.1762 to 1.1724 is potential support. This zone stopped the selling at 1.1745 on November 11.


Daily Swing Chart Technical Forecast

The direction of the EUR/USD into the close is likely to be determined by trader reaction to 1.1855.

Bullish Scenario

A sustained move over 1.1855 will indicate the presence of buyers. The first upside target is 1.1894. Overtaking this level could trigger a surge into the main top at 1.1920.

Bearish Scenario

A sustained move under 1.1855 will signal the presence of sellers. This could lead to a labored break with downside targets coming in at 1.1832 and 1.1807.

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

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