This week is turning out to be a nightmare for the Euro buyers, as the EURUSD pair continued its decline yesterday. One of the main reasons for the decline was the Euro area consumer price index, which is expected to fall further in September. One of the other releases which affected the Euro was the German unemployment data. The German unemployment change climbed more than expected. This was also a trigger for a downside reaction during yesterday’s London session. So, the market sentiment was not at all in the favor of the Euro buyers.
However, later there were a couple of important economic releases during the NY session, which came as a disappointment. The US dollar retreated from the highs after the release, and gave an opportunity to the Euro buyers to take it higher from the lows.
Euro Area Consumer Price Index
Yesterday, the Euro area consumer price index was the highlight of the day which was released by the Eurostat. The report published mentions that the Euro area CPI is expected to decline from 0.4% to 0.3% in September 2014. The most disappointing part was the core consumer price index, which is expected to decline from 0.9% to 0.7% in September 2014. The report added that the service sector in the Euro area is expected to have the highest annual rate in September.
The EURUSD pair was seen trading lower after the release, as it collapsed below the 1.2600 support area. It traded as low as 1.2570 during yesterday’s London session. The Euro sellers were aggressive, and they did not show any respect to the 1.2600 area.
German Unemployment Data
The German unemployment rate and unemployment change figures were also released during the London session by the German Statistics Office. The German unemployment rate remained at 6.7% as expected by the market. However, the disappointing part was the German Unemployment change, which was expected to register a reading of -2K. However, the outcome was very disappointing, as the report mentioned that the number of unemployed people increased by 13K during in September 2014.
This started the downside acceleration in the Euro, and encouraged sellers to take the shared currency lower. The US dollar was broadly seen trading higher during the London session.
Chicago PMI and CB Consumer Confidence
There were a couple of releases lined up during the NY session yesterday, including the Chicago PMI and CB consumer confidence. Both releases were on the negative side, and ignited selling in the US dollar. The worst outcome was the CB consumer confidence, which declined from 93.4 to 86.0. So, the US dollar lost some of its gains against the Euro and the British pound.
Technically, the EURUSD pair traded towards the 1.2550 level during the London session yesterday. The mentioned level might hold for some time, but one cannot deny more losses in the near term. However, there is a chance of a short-term correction, which could find hurdle around the 1.2650-80 resistance area.
So, keep an eye on all the important levels friends and trade accordingly.
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