EUR/USD Prediction for January 19, 2017

The EUR/USD edged lower on Wednesday as the dollar recovered some of its losses following the Trump comments on Tuesday and after a slightly better than expected consumer price index.  Support on the currency pair is seen near the 10-day moving average at 1.0607.  Resistance is seen near the December highs at 1.0873.  Prices formed an inside day which is a sign of indecision.  Momentum remains positive as the MACD (moving average convergence divergence) index prints in the black with an upward sloping trajectory which points to higher prices.

U.S. CPI increased by 0.3% in December, slightly better than expected while the core reading which excludes food and energy increased by 0.2% as expected. There were no revisions to November’s 0.2% gains. On an annual basis, headline prices accelerated to a 2.1% year over year pace versus 1.7% year over year, with the core up at 2.2% year over year versus 2.1% year over year.