Table of Contents
Affiliate Disclosure
Affiliate Disclosure DailyForex.com adheres to strict guidelines to preserve editorial integrity to help you make decisions with confidence. Some of the reviews and content we feature on this site are supported by affiliate partnerships from which this website may receive money. This may impact how, where and which companies / services we review and write about. Our team of experts work to continually re-evaluate the reviews and information we provide on all the top Forex / CFD brokerages featured here. Our research focuses heavily on the broker’s custody of client deposits and the breadth of its client offering. Safety is evaluated by quality and length of the broker's track record, plus the scope of regulatory standing. Major factors in determining the quality of a broker’s offer include the cost of trading, the range of instruments available to trade, and general ease of use regarding execution and market information.
toc-menu-hamburger.png
table of content

Table of Contents

toggle-toc.png

EUR/USD Forecast: Euro Plunges After CPI Surprises

By Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
  • During my daily analysis of major currency pairs, the Euro stands out as it has plunged quite drastically.
  • While you could have made an argument that the 1.12 level is a major barrier and it should not be a huge surprise that we have pulled back from there, the reality is that the CPI numbers coming out at 1.8% year-over-year instead of the target rate of 2.0% that the European Central Bank is typically aiming for.
  • In other words, a lot of traders started to think that perhaps the European Central Bank will have to keep monetary policy a bit looser than anticipated, as the idea is that perhaps inflation and economic growth is struggling on the continent.

EUR/USD Forecast Today - 02/10: Euro Plunges (Chart)

Top Forex Brokers

1
Get Started 74% of retail CFD accounts lose money Read Review

Technical Analysis

Looking at the technical Analysis, it’s worth noting that we did form a bit of a “double top” at the 1.12 level, and of course we also had seen a bit of divergence at the Moving Average Convergence Divergence indicator of the last several sessions, so it makes a certain amount of sense that we would see the 1.12 level offer a bit of a ceiling. Furthermore, you can also make an argument that the 50 Day EMA is worth watching, as it is an area that we have bounced from later in the session, and of course it is an indicator that a lot of traders will pay close attention to.

Underneath all of that, the 1.10 level is a large, round, psychologically significant figure, and an area that has a certain amount of “market memory” attached to it, as it had previously been resistance. In other words, I think there are most certainly going to be buyers underneath, and I think it’s probably only a matter of time before we do bounce and rally. However, this doesn’t mean that we have to do so, nor does it mean that it’s necessarily a clear-cut case.

If we were to break down below the 1.10 level, then it’s likely that the market really starts to fall apart, and that probably ushers in a new “flight to safety” type of trade around the world, not just in this market. As things stand right now though, I think we have a long way to go before that actually happens.

Ready to trade our daily EUR/USD Forex analysis? We’ve made this forex brokers list for you to check out.

Christopher Lewis
About Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
 

Most Visited Forex Broker Reviews