The Euro hit its highest level in over a week in yesterday’s trading session before pulling back towards the end of the day as traders booked in profits ahead of today’s super Thursday where a raft of economic news will hit the market from both sides of the Atlantic and some major movement in the Euro/USD currency pair is expected.
During the New York trading session, the Euro reached $1.2218 which was short lived and end the day basically where it started which shows the market is divided on the outcome of the crucial CPI figures from the US which are due to be released today.
The CPI for May is expected to jump from 4.2% to 4.7% while the more important core CPI which excludes food and energy is expected to come in at 3.4% which is a more than 10% gain of 3% from the previous period.
A monetary speech from the European Central Bank, where they are expected to outlay their fiscal policy moving forward hits the market at exactly the same time as the CPI figures, and a lot will depend on the continuing optimism of ECB President Christine Lagarde on the Eurozone’s outlook.
The Euro will likely remain in a trading range of between $1.2145 and 1.2220 before the release of today’s major news.
The chart shows the Euro was firmly rejected in yesterday’s trading session when it reached the resistance line which was established last Thursday and has now fallen back below the critical support line which started on Tuesday.
We may see the currency push back above this support level which will be an important psychological factor and will serve as a base for the Euro to push higher on the back of good news today.
A break above the current resistance level may see it turn into the new support level and see the currency make a run for the high of $12261 reached a few weeks ago.